Japanese Refiners Buy Middle East Crude Through Ship-to-Ship Transfers

Several Japanese oil tankers are returning to the Middle East to pick up crude cargoes for Japan’s refineries, but none of these are moving into the Persian Gulf through the Strait of Hormuz. Instead, a rising number of Japan-owned or Japan-bound tankers – most of which have steered clear of the Middle East since the Iran war began – are returning to waters in the Gulf of Oman to participate in ship-to-ship (STS) transfers offshore Oman or Fujairah, Bloomberg reported on Tuesday, quoting shipbrokers and tanker-tracking data. For…

Refining & Products Context

Downstream margins — or crack spreads — have experienced considerable volatility as refinery operators navigate feedstock cost fluctuations, product demand seasonality, and evolving fuel specifications. Gasoline and distillate margins serve as key profitability levers for integrated refiners.

Refinery utilization rates, particularly in the U.S. Gulf Coast and Northwest European hubs, directly influence product availability and pricing. Unplanned outages, scheduled turnarounds, and weather-related disruptions are recurring factors that tighten regional product supply.

What to Watch

Key metrics to watch include refinery utilization rates, weekly distillate inventory builds or draws, and crack spread movements, which serve as real-time indicators of refining profitability across major processing hubs.