APPEC: Oman crude gains Asia value as delivery security rises: industry sources

Oman Export Blend is rapidly becoming Asia's preferred medium-sour crude in the Persian Gulf market, owing to its limited exposure to logistical risks stemming from the US-Iran conflict, prompting some refiners to plan to secure higher term volumes, according to refining industry sources attending the APPEC 2026 hosted by S&P Global Energy in Singapore over Sept. 7-10.

Oman's crude exports have direct access to the Indian Ocean for voyages to the Far East, without the need to pass the Strait of Hormuz, which is a great advantage for Asian end-users that need to secure adequate volumes of medium sour grades; refinery plant operations and logistics managers from Japan, Malaysia, India and South Korea told Platts, part of S&P Global Energy, on the sidelines of APPEC.

China has been the dominant buyer of Oman Export Blend, but competition for the medium-sour crude is likely to intensify among other Asian buyers as several regional refiners seek to secure larger term volumes, plant operations managers and linear programming model analysts at Indian and Malaysian refiners told Platts.

Asia's third- and fourth-biggest crude importers, South Korea and Japan, typically preferred Iraqi Basrah Medium and Kuwait Export Blend over Oman before the Middle East conflict, but refiners are seeing much higher value in the Omani supply, logistics, and product managers at refiners based in Chiba and Ulsan told Platts.

"Feedstock economics and refining margins dominated crude-slate decisions before the crisis, but procurement strategies have shifted toward prioritizing guaranteed, timely deliveries," a Chiba-based refinery operations manager told Platts.

Refiners must balance affordability with security of supply because, without sufficient crude, they cannot produce or deliver fuels regardless of the price or potential margin, Takahiro Yamamoto, president and CEO at Taiyo Oil, said during a panel discussion at the APPEC conference on Sept. 9.

"The government played an important role through trade diplomacy in securing additional Omani crude this year, while South Korean refiners increased their purchases of Oman crude, partly offsetting the decline in Iraqi Basrah Medium intake," a Ulsan-based refinery source told Platts.

South Korea imported 12.4 million barrels from Oman in the first seven months, more than a threefold jump from 3.97 million barrels received over the same period last year, latest data from state-run Korea National Oil Corp. issued Aug. 27 showed.

South Korean Trade Minister Kim Jung-kwan highly valued Oman's contribution to the stable supply of crude oil and naphtha as a key energy and resources cooperation partner of South Korea, the Ministry of Trade, Industry and Resources said in a statement on June 1.

Kim expressed appreciation for the Omani government's active cooperation in ensuring stable supplies, and requested its continued attention and support to ensure the uninterrupted implementation of the crude oil and naphtha supply arrangements, MOTIR said.

Oman crude output, exports

Oman Blend exports have been steady over the last 12 months, even with the onset of the war in the Middle East. In August, exports of the grade totaled 841,000 barrels/day, compared with 836,000 b/d in February, right before the war broke out, according to S&P Global Commodities at Sea.

China is the primary buyer of the grade, averaging shipments of about 700,000 b/d in the six months before the war, but cut imports of the grade in April by roughly half. Over the summer, China imported no Oman Blend in June and around 60,000 b/d in May and July, with imports recovering to 326,000 b/d in August, according to CAS data.

Other East Asian buyers have ramped up shipments of the grade to replace other Middle Eastern grades now trapped in the Strait of Hormuz. Taiwan, India and South Korea have emerged as regular buyers of the grade, beginning in April, with Singapore and Vietnam now also taking smaller volumes each month, according to Platts analysis of the CAS data.

Omani crude cargo during Platts MOC

In recent months, trading participants actively exchanged Oman crude cargoes in the Singapore Platts Market on Close assessment process.

On Aug. 24, Unipec declared a cargo of October Oman crude to Mercuria following the convergence of 20 partials in Platts Cash Dubai, while Vitol declared a cargo of September Oman crude to Trafigura on July 29.

A convergence occurs when 20 partials are traded between two counterparties in the same direction, resulting in a full 500,000-barrel physical cargo being declared from the seller to the buyer.

Meanwhile, Platts assessed the spread between Cash Dubai and the same-month Dubai swap at an average of $10.16/b so far in 2026, compared with $1.998/b in 2025. Platts Cash Dubai is an international physical sour crude benchmark representing a basket of key Middle Eastern medium-sour grades, including Oman.

The spread — widely known as the Dubai M1-M3 market structure — reached its record high of $65.69/b on March 19 and remained in steep backwardation at $29.09/b on Sept. 10.

The Platts Dubai market structure is a key component of the monthly official selling price calculations used by Middle Eastern producers.