Middle East Crude Prices Hit Record Highs as Supply Disruptions Rattle Global Oil Market

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Singapore: Middle East crude benchmarks have surged to record highs, becoming the most expensive oil globally, even as trade volumes slump amid the ongoing conflict involving the United States and Israel and Iran.

The sharp rise in benchmarks, which are used to price millions of barrels of Middle Eastern crude bound for Asia, is driving up costs for Asian refiners and forcing many to seek alternative supplies or cut output in the coming months.

Cash Dubai crude was assessed at an all-time high of $153.25 per barrel for May-loading cargoes, according to S&P Global Platts, surpassing the previous peak of Brent futures at $147.50 set in 2008.

The premium of Dubai crude to swaps – paper oil contracts used for pricing and trading without physical delivery – rose sharply to $56.01 per barrel, compared with an average of just 90 cents in February, according to data from Reuters.

Similarly, Oman crude futures climbed to a record $147.79 per barrel, with their premium to Dubai swaps surging to $50.57 per barrel, far above February’s average of 75 cents.

Market participants say the benchmarks are increasingly distorted, pointing to a significant price gap with Murban crude futures, which settled at $111.76 per barrel on Monday.

Exports of Middle Eastern crude to Asia have dropped sharply, falling to 11.665 million barrels per day in March from nearly 19 million in February, according to data from analytics firm Kpler. The figure is also about 32 per cent lower than levels seen in March 2025, largely due to disruptions to shipping through the Strait of Hormuz.

Several Asian refiners have already reduced operating rates as supply tightens.

Reduced supply and pricing concerns

Industry sources attribute the price spike to reduced supply available for delivery during the Platts Market on Close (MOC) process, after certain crude grades transported via the Strait of Hormuz were excluded.

Some refiners argue that the remaining grades, including Oman and Murban, are not fully representative of the broader Middle Eastern crude market.

“It is unnatural and unfair pricing because of thin trading,” one refining source said, noting that limited participation is skewing benchmark values.

Another source said trading of May-loading Middle Eastern crude has slowed significantly, suggesting that the Dubai and Oman benchmarks are no longer functioning effectively.

In response, S&P Global Platts said its Dubai benchmark continues to reflect spot market activity, adding that trading during the MOC process has remained robust this month.

However, traders noted that TotalEnergies has been the primary buyer in the Platts window, purchasing 24 cargoes of Oman and Murban crude, equivalent to around 12 million barrels. The company declined to comment.

Platts has said it is seeking immediate market feedback on the deliverability of Middle Eastern crude and its Dubai benchmark methodology.

Shift to alternative supplies

Meanwhile, Asian refiners are increasingly turning to alternative sources, driving up premiums for crude from the Americas and Africa.

Traders said Brazilian crude premiums have surged to between $12 and $15 per barrel above ICE Brent, while premiums for West African crude have also risen, with most April-loading cargoes already sold.

The ongoing supply disruption and price volatility are expected to continue weighing on global oil markets in the near term.