Asia turns to US energy as Middle East war disrupts supply

American oil and gas are currently in high demand abroad, as Asian countries—heavily dependent on energy imports from the Middle East—are looking for alternative sources of supply, Caliber.Az reports, citing CNN.

According to Argus Media, a market pricing company, the price of U.S. light sweet crude for delivery to Asia has risen by 47% to $115 per barrel since the United States and Israel launched their first strike on Iran. Meanwhile, the cost of transporting liquefied natural gas (LNG) from the United States has increased more than fourfold, and at least four shipments of American LNG have been redirected from Europe to Asia.

Although Japanese refineries have purchased up to 9 million barrels of U.S. oil for delivery in June since the start of the war, other Asian buyers are reluctant to pay such high prices and are waiting for the situation to improve, said Fabian Ng, head of Asian oil pricing at Argus.

However, tensions around the Strait of Hormuz—through which about 80% of Asia’s fuel supplies pass—are escalating. On March 10, the U.S. military said it had destroyed 16 Iranian minelayers near this critical energy route.

Commenting on the matter, President Donald Trump recently warned Iran about the consequences of placing mines in the Strait.

“If Iran has put out any mines in the Hormuz Strait, and we have no reports of them doing so, we want them removed, IMMEDIATELY! If for any reason mines were placed, and they are not removed forthwith, the Military consequences to Iran will be at a level never seen before,” Trump said in a post on Truth Social.

He notes that if, on the other hand, they remove what may have been placed, it will be a giant step in the right direction.

“Additionally, we are using the same Technology and Missile capabilities deployed against Drug Traffickers to permanently eliminate any boat or ship attempting to mine the Hormuz Strait. They will be dealt with quickly and violently,” the US President added.

As the war has cut many Asian countries off from their main energy source, some of them, such as Indonesia and Pakistan, have been forced to rely on reserves that may last only a few weeks. Energy Aspects analysts say, amid the sharp surge in demand, the United States does not have the production capacity to compensate for the global shortage of oil and gas from the Middle East.

“Most Asian buyers are resorting to storage, fuel-switching and some industrial demand curtailment to offset lost LNG,” said Livia Gallarati, Energy Aspects’ head of global gas.

By Khagan Isayev