Middle East crude oil exports collapsed nearly 60% between early February and early March 2026, falling from 18.7 million barrels per day to 5.9 million barrels per day, as the Strait of Hormuz faced paralysis, according to Wood Mackenzie’s VesselTracker. This disruption led to an unprecedented global energy reorganization, as Europe imported record amounts of crude oil and refined products from North America while simultaneously exporting surplus gasoline and fuel oil to Asia.
“This is not a temporary disruption but a structural shift in global energy flows,” said Javier Solis, an analyst at Wood Mackenzie – Maritime Team. “Europe’s diesel deficit and gasoline surplus, combined with Asia’s role as an balancing valve, presents a shifting landscape where prices and flows remain closely linked to political decisions rather than pure trade signals.”
Double choke point paralysis forces rapid reconfiguration
The Strait of Hormuz showed an almost complete paralysis of crude oil flows, with Middle East exports falling by more than 60% over five weeks based on loading programs and sailing confirmations. In contrast, traffic through Bab al-Mandab and the Suez Canal was modified rather than closed. East-west flows of clean petroleum products have been partially redistributed between Suez and the Cape of Good Hope, with Suez remaining the dominant corridor despite an apparent decline in transit from month to month.
In response, Saudi Arabia rapidly reconfigured export routes. Loadings at Yanbu have risen from about 735,000 bpd before the conflict to more than 3 million bpd, reflecting a deliberate reduction in exposure to the Strait of Hormuz. The Red Sea remains navigable for risk-tolerant operators, but these structural redirections indicate deeper concerns about the reliability of the corridor rather than an immediate closure.
Europe imports crude from North America while facing a structural diesel deficit
With flows restricted in the Middle East and Gulf region, Europe has been replacing lost supplies with North American crude and long-term finished products. US crude imports reached 1.41 million barrels per day in the closing week of March, while Canadian crude shipments rose by 16% to 1.019 million barrels per day, with increasing flows to Germany and Ireland. These quantities have allowed European refineries to maintain their productivity, especially for gasoline and fuel oil, despite the ongoing shortage of diesel fuel.
The diesel market in Europe faces a structural deficit driven by multiple factors. The eastward redirection of 3.6 million metric tons of MEG and Indian distillates removed traditional westbound supplies. Baltic diesel exports collapsed by 76.7%, eliminating another major source. European diesel prices remain above €2.00 per litre, supported by heavy reliance on premium US imports and worsening oil disruptions directly linked to the Strait of Hormuz.
Europe exports surplus gasoline and fuel oil east
While diesel remains scarce, Europe exports surplus unleaded motor oil (UMS) and fuel oil (FO) to Asia and Africa. UMS East Suez exports rose 79.7% week-on-week to 591,685 metric tons, primarily destined for Pakistan and South Africa. Fuel oil exports also accelerated, with Singapore absorbing 336,260 metric tons of European supplies along with additional flows to Ain Sokhna, Houston and Rotterdam.
Asia absorbs the surplus while importing record crude from North America
Asia has emerged as the global release valve, absorbing Europe’s surplus gasoline and fuel oil along with record amounts of North American crude. US crude flows to Asia matched European consumption by 1.41 million barrels per day during the same period, with India and East Asia dominating revenues. East Asia has emerged as the largest destination for crude oil exports from the Canadian West Coast. Asian markets are holding regional distillates in-house, consolidating MEG and Indian gasoil eastwards rather than allowing traditional westbound flows.
Market implications: Continuing premiums and new risk variables
Wood Mackenzie expects European diesel premiums to remain high through the second half of 2026, supported by structural supply constraints. European refiners face continued margin pressure on gasoline, with the possibility of continued oversupply. Crude oil flows are redrawn in real time, requiring cargo level tracking to accurately manage exposure.
Chokepoint risk has evolved from an isolated variable to a portfolio-wide concern. Energy buyers and traders must design dual disturbance scenarios and multi-region analysis. “What began as a widening Iran-linked conflict has evolved into a dual corridor disruption, where the Red Sea and the Strait of Hormuz together restrict global trade flows – an apparent shift in GPS traffic patterns and real-time physical movements, turning regional risks into a global supply chain crisis,” said Christopher Aversano, director of marine research.
Source: Wood Mackenzie
