Middle East Oil Becomes Most Expensive in the World as War Cuts Supply

Reuters

12:12 JST, March 18, 2026

SINGAPORE/NEW DELHI, March 16 (Reuters) – Middle East crude oil benchmarks soared to all-time highs, becoming the most expensive in the world, even as trade slumps due to the war in Iran, with some traders arguing that the benchmarks have lost relevance due to supply disruption.

The surge in the benchmarks, used to price millions of barrels of Middle Eastern crude bound for Asia, is pushing up costs for Asian refiners, forcing them to seek alternatives or reduce output further in coming months.

Cash Dubai was assessed at a record $157.66 per barrel on Tuesday for May-loading cargoes, S&P Global Platts said, surpassing Brent futures’ LCOc1 all-time high of $147.50 in 2008.

That put Dubai’s premium to swaps at $60.82 a barrel on Monday versus an average of 90 cents in February, data from Reuters showed.

Similarly, Oman crude futures hit a record high of $152.58 per barrel, setting their premium to Dubai swaps at $55.74 a barrel compared to just 75 cents on average in February.

Dubai prices are distorted given their wide price gap with Murban futures which settled at $114.03 a barrel on Tuesday, three trade sources said.

Middle East crude exports fell to 11.665 million barrels per day (bpd) in March from nearly 19 million bpd in February and down about 32% versus March 2025 levels, as the war halts shipping through the Strait of Hormuz, data from analytics firm Kpler showed.

Several Asian refiners have reduced operating rates.

REDUCED SUPPLY

Some refining sources blamed the price spike on reduced supply available for delivery during the Platts Market on Close process, after the agency dropped three crude grades that transit via the strait.

One of the sources said the pricing was unfair because the remaining grades – Oman and Murban – are not representative of the benchmark used to price Middle Eastern and also some Russian barrels.

Another refining source said May-loading Middle East crude trade has stalled as the Dubai and Oman benchmarks are broken. The sources declined to be named as they spoke on the condition of anonymity.

“Platts Dubai continues to reflect the value of Middle Eastern sour crude trading in the spot market,” an S&P Global Energy spokesperson said in an email, adding that activity during the Platts MOC has been robust this month, with multiple cargoes delivered.

However, traders said TotalEnergies TTEF.PA has been the main buyer receiving cargoes in the Platts window. The French major snapped up 42 Oman and Murban crude cargoes, or 21 million barrels, this month, trade data showed. TotalEnergies declined to comment.

Platts said on Monday it is seeking immediate feedback on the deliverability of Middle East crude and Platts Dubai crude benchmark methodology.

AFRICA, AMERICAS FOR ALTERNATIVE SUPPLY

Spot premiums for crude from the Americas and Africa have risen as Asian refiners scramble for supply.

Two traders said premiums for Brazilian spot crude hit records of $12-$15 a barrel to dated Brent. Premiums for April-loading West African crude on a free-on-board basis were up about $1 a barrel from a month ago, with most cargoes sold, one of the traders said.