U.S. refineries are, of course, far less dependent on crude oil from the Middle East than they were before the Shale Revolution. But the cutoff in oil supplies from the Persian Gulf is forcing several U.S. refiners to look elsewhere for the mostly medium-sour crude they had been sourcing from the region.
The ongoing conflict between the U.S. and Iran and the near-total closure of the Strait of Hormuz isn’t just stranding significant volumes of refined products in the Persian Gulf. It’s also resulting in potentially extensive and long-lasting damage to some refineries there and trapping crude oil that Asian refiners depend on.
A lot of attention has been paid to the massive volumes of crude oil and LNG currently trapped in the Persian Gulf. What’s sometimes overlooked, however, is that Kuwait, Saudi Arabia and the United Arab Emirates are also major exporters of refined products, and that they and Qatar also send out copious amounts of LPG.
