- Asia refineries cut runs amid Middle East oil & shipping disruptions.
- South Korea, Japan, India, Singapore reduce throughput 5–15%.
- Rerouting via Cape adds 10–20 days; higher freight & insurance costs.
Several large refineries in Asia made a start at cutting their crude processing rates in the first days of March 2026 due to the current tight supplies of oil from the Middle East and disrupted shipping routes. The voluntary reduction in work hours comes after the repeated attacks of commercial vessels in the Red Sea and Gulf of Aden as well as the high level of geopolitical tensions which have caused many tankers to take the route around the Cape of Good Hope.
Major refiners in South Korea, Japan, India, and Singapore have in the last few days reduced their processing capacities by between 5 and 15% in order to cope with the availability of feedstocks and avoid excessive depletion of stocks.
The Korean refineries (SK Energy, GS Caltex, S, Oil) and the Japanese ones (ENEOS, Idemitsu Kosan) mentioned that the prolonged journey times of 10, 20 days for each round trip and the significantly increased freight and insurance costs have been the major reasons for that decision. Refiners in India, such as Reliance Industries and Indian Oil Corp, have also done selective run cuts to get the best out of crude blends amid limited medium, sour grades from the Middle East.
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The redirection of shipping routes has resulted in a 15, day increase in the duration of an average voyage from the Persian Gulf to Asia, thereby increasing prices of delivered crude and putting pressure on refining margins. Spot freight rates for very large crude carriers (VLCCs) on the Middle East, Asia route have skyrocketed, and war, risk premiums for vessels passing through high, risk areas remain high.
Refiners are reacting by supplementing their purchases of fine crudes from West Africa, the Americas, and Russia, although these grades usually require modifications to processing units and give lower yields of diesel and jet fuel main products in the Asian market. Besides, some plants are maximizing runs on domestic or locally, produced crudes to reduce their exposure.
People in the industry say that they anticipate the drop in runs to be enduring till at least the second quarter of 2026 unless shipping security in the Middle East improves substantially. It is one of the reasons why product balances in Asia are tightening, with gasoline and middle distillates cracking spreads remaining at a high level even though the overall demand in some parts of the region is weaker.