Published by Global Banking & Finance Review®
Posted on March 30, 2026
4 min readLast updated: March 30, 2026
Add as preferred source on GoogleSupply disruptions from Iran’s blockade of the Strait of Hormuz—shutting about 10 million barrels a day—are tightening supply in Europe and Africa, pushing up differentials and premiums as Asian demand soars.
By Robert Harvey and Alex Lawler
LONDON, March 30 (Reuters) - The European and African oil market is showing more signs of tightness with some crude differentials hitting record highs as peak summer demand nears and Asia seeks supplies to fill shortages caused by Iran's blocking of the Strait of Hormuz, now into its fifth week.
The Iran war has forced the shutdown of at least 10 million barrels per day of oil from the Middle East due to Iran's effective closure of the strait, and attacks on Iranian and other Middle East Gulf nations' energy infrastructure. That production volume represents at least 10% of daily global oil consumption.
Asia has been most affected by oil and gas disruptions, as it is the world's largest oil-importing continent and relies on supplies from the Middle East. The Middle East Dubai oil benchmark hit an all-time high of $169.75 on March 23, breaking Brent futures' previous record of $147.50 set in 2008 to become the most expensive oil benchmark ever.
In an example of tightening markets, North Sea Forties crude surged to a $7.20 per barrel premium to dated Brent on Friday, the highest on record according to LSEG data. The paper markets surrounding North Sea physical prices also show tightness. The first week of the short-term Brent swaps curve, known as contracts for differences, which indicates the dated Brent value, was trading $12.35 a barrel higher than the contract six weeks ahead on March 27, also a record.
"Globally, there are fewer barrels available, so the people who need them are bidding prices up," said Neil Atkinson, former head of the oil markets division at the International Energy Agency and a veteran oil analyst.
ASIA BUYING MORE OIL FROM EUROPE, AFRICA
Shortages and stiff competition from Asian buyers looking to secure valuable barrels elsewhere have pushed up prices for European buyers, Morgan Stanley analysts said on Monday.
"The supply being diverted east is coming out of the pool that Europe would otherwise use to balance itself," the Morgan Stanley analysts said, adding that more oil from West Africa, which can swing between European and Asian buyers, is heading to Asia.
On Monday, U.S. WTI Midland crude, which helps set the dated Brent benchmark, traded at a record $9.50 per barrel premium to dated Brent for delivery to Europe, almost $8 higher than before the war started.
Crude and products shipments to Asia from Europe, plus key West African producers Angola and Nigeria, are set to rise by about 200,000 bpd in March from February to 3.72 million bpd, according to Kpler.
Some fuel shipments have even rerouted away from Europe towards Asia and Africa, a further sign of tough global competition for short supplies.
Four tankers carrying 168,000 tons of U.S. diesel and gasoil have diverted away from Europe and towards South Africa in recent weeks, according to consultancy Energy Aspects. That follows at least four other tankers carrying a combined 430,000 tons of Middle Eastern and Indian diesel in late-February to early-March, which began sailing towards Europe and then U-turned towards Southeast Asia, the data showed.
European gasoline cargoes are also heading to Asia after Asian prices surged on tightening supply, and Asia is also taking more crude cargoes from Europe and West Africa, according to trade sources and shipping data.
(Reporting by Robert Harvey in London, editing by Rod Nickel)
Markets are tightening due to Asia increasing its imports after supply disruptions caused by Iran's blockade of the Strait of Hormuz.
The disruption has led to record-high oil prices, with benchmarks like Dubai and North Sea Forties reaching all-time highs.
Europe and West African countries such as Angola and Nigeria are exporting increased amounts of oil to Asia.
Asian demand is diverting supply away from European markets, leading to tighter availability and higher prices in Europe.
At least 10 million barrels per day of Middle East oil production has been shut down due to the ongoing conflict.
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