Even if the Strait of Hormuz were to reopen immediately — as President Trump has urged — the damage to the global oil market is already entrenched. Some changes will not simply snap back once the conflict ends. One of the most significant is Asia’s refining feedstock slate, which has already shifted noticeably lighter, with implications for product balances that will persist well beyond the current disruption.

Medium-Sour losses cannot be replaced

The de-facto closure of Hormuz has blocked nearly 12mbd of crude flows to Asia in March (excluding Iranian barrels and based on 2025 average transit rates). Of this, 7.9mbd is medium-sour crude — the core feedstock for Asia’s distillate-oriented refiners — alongside 2.7mbd of light-sour and 1.1mbd of heavy-sour.

This roughly 8mbd medium-sour gap is simply far too large to fill through rerouted flows.

The March data shows why.

Saudi Aramco has maximized the East–West pipeline to divert Arab Light — a key medium-sour grade — to Yanbu terminals on the Red Sea, lifting loadings to a record 3.8mbd, up 2.3mbd from the 2025 baseline.

But despite Yanbu’s combined 4.5mbd capacity, Aramco’s guidance to term customers that only Arab Light will be supplied in April and May indicates the constraint lies in production, not terminal capacity.

For reference, Arab Light’s historical peak was 3.7 mbd in 2022, with one month briefly reaching 4.4 mbd, while its 2025 average was 3.3 mbd. This suggests that March’s rate is already close to a sustainable production ceiling.

The UAE has similarly rerouted crude to Fujairah via pipeline, but the incremental barrels are light-sweet Murban and therefore do not address the medium-sour shortfall.

Beyond the Middle East, the only meaningful medium-sour supplies available are from Russia — and most of these were already flowing to Asia before the conflict. Additional options, such as Kazakh Blend or North Sea and U.S. grades, offer only small upside for Asian buyers.

Even after accounting for all diversions, Asia still faces a 5.5mbd medium-sour shortfall for March.

If more tankers opt to transit Hormuz, or if Iraqi exports move freely in April under Iranian approval, the region would still confront at least a 2mbd of medium-sour deficit.

Replacement barrels are concentrated at the light end

Meanwhile, the incremental loadings that are reaching Asia are overwhelmingly light-sweet. March increases include:

Additionally, the 0.5mbd increase in South American flows — including Brazilian grades — is dominated by medium-sweet crudes, which are still lighter than what Asian refiners typically run. As a result, Asia’s crude slate has shifted materially lighter, with the light-sweet share rising to a record high in March loadings.

The shift will persist even after Hormuz reopens

The challenge is that this shift cannot reverse immediately once Hormuz becomes navigable again. Significant structural production damage appears to have occurred in the Middle East Gulf — widely acknowledged by the market despite the absence of official figures — and repairs will take well beyond the point when Strait transits fully resume.

This sustained quality shift has clear implications for product balances:

As Asian refiners run more light-sweet crude, middle-distillate output will remain structurally lower, while light-end yields rise.

These dynamics are already evident in the Asian product cracks: diesel and jet margins have skyrocketed, whereas naphtha and gasoline cracks have held steady, supported by stronger light-end availability despite lower crude runs. Source: Vortexa