Saudi Arabia Hikes Crude Premiums Amid Hormuz Tensions

Prices for European customers also surged, requiring an additional $24–$30 per barrel on top of the Brent benchmark, which is about $108 per barrel, a rare simultaneous increase across all regions, according to the Financial Times. The immediate cause is logistics disruption due to Iran tightening control over the Strait of Hormuz, severely restricting vessel traffic.

Saudi Arabia is running its trans-Arabian pipeline at maximum capacity to the Red Sea coast, increasing loadings at the western port of Yanbu, but total exports remain at about half of normal. Asian refiners, reliant on Middle Eastern high-sulfur crude, are hardest hit, facing mounting cost pressures due to limited alternative supplies.

OPEC and OPEC+ agreed to boost May output, but this increase covers only about 2% of the crude supply blocked by the Strait of Hormuz shutdown and is trapped behind the strait, rendering it a "symbolic step with no real effect."