Key facts
- The U.S.-Iran war has altered Asia's energy import routes, benefiting U.S. and Russian supply.
- Disruptions through the Strait of Hormuz are impacting global LPG and LNG trade.
- Sinopec is increasing purchases of Russian ESPO crude for July-September delivery.
- The UAE is increasing oil exports by using onshore pipelines and ports outside the Strait of Hormuz.
- Glencore's energy trading profits surged 66-fold to $2.66 billion in the first half of 2026.
- European shares reached a new record high amid optimism for a U.S.-Iran peace deal.
- U.S. crude oil exports fell to 3.66 million barrels per day in July, an eight-month low.
- Indian refiners are seeking West African and Omani crude to replace Middle Eastern supplies.
- European naphtha imports rose in July, with increased arrivals from the Mediterranean, North Africa, and the U.S.
- The conflict has led to force majeure declarations and slowed exports from the Persian Gulf.
The U.S.-Iran war has fundamentally altered Asia's energy import routes, with the United States and Russia emerging as significant beneficiaries. The conflict has disrupted traditional maritime transit through the Strait of Hormuz, forcing a reassessment of energy security and supply chain strategies across the region. This crisis has significantly impacted global liquefied petroleum gas (LPG) trade, leading to rising U.S. exports and disruptions for Middle Eastern suppliers, which in turn has increased propane prices and prompted a realignment of trade routes. China's Sinopec has responded by increasing its purchases of Russian ESPO crude for July-September delivery, securing 30-40 shipments to offset Middle Eastern supply issues and prioritize delivery certainty and lower costs amid geopolitical tensions.
Despite blockades, the United Arab Emirates has managed to boost its oil exports to pre-crisis levels by utilizing onshore pipelines and 'dark mode' tankers, and by offering sales from ports located outside the Strait of Hormuz. The broader Middle East conflict is also disrupting global liquefied natural gas (LNG) flows, causing price surges and potentially reshaping long-term demand. While crude oil has garnered more attention, LNG's flexibility is being tested by force majeure declarations and slowed exports from the Persian Gulf, impacting energy security for importing nations. Glencore reported a remarkable 66-fold increase in energy trading profits for the first half of 2026, reaching $2.66 billion, directly attributed to market dislocations caused by the Iran war, with the company also experiencing a significant rise in trading volumes.
In response to shipping constraints in the Strait of Hormuz and Bab el-Mandeb, Indian refiners are increasingly turning to West African and Omani crude grades. Companies such as MRPL, IOC, and HPCL have secured substantial volumes from Angola, Congo, and Nigeria to replace disrupted Middle Eastern supplies. Concurrently, European naphtha imports rose in July to 1.74 million tons, driven by increased arrivals from Mediterranean and North African suppliers, alongside the highest shipments from the U.S. since August 2025, supported by strong gasoline blending economics. European shares reached a new record high, fueled by robust corporate earnings and optimism surrounding a potential U.S.-Iran peace deal that could reopen the Strait of Hormuz, with notable gains reported by Deutsche Telekom and Glanbia. However, U.S. crude oil exports in July fell to 3.66 million barrels per day, an eight-month low, attributed to a temporary influx of Middle Eastern oil following a U.S.-Iran peace deal and high domestic refinery utilization.
The ongoing conflict and its associated disruptions are creating significant opportunities for energy traders and alternative supply routes, while simultaneously challenging established energy security frameworks for importing nations. The potential for a U.S.-Iran peace deal offers a prospect for the normalization of trade routes, but current market dynamics reflect a significant shift in supply and demand patterns.