Iran's war reveals the tremendous dependence on Asia of the Middle East oil

Oil buyers and traders in Asia monitor the escalation of tension around Iran with caution and anxiety, while the largest oil -fed area in the world prepares for the possibility of supplies coming from the Arab Golf State region. Asia imports more than four -fifths of the total crude oil in the Middle East, and 90% of these quantities are sent via the hormuz street, according to the data of the company “Kpler”. Below are three most important issues that cause the Asian market about the expansion of the conflict: the relationship between Iran and China, China, the largest country in the world in the field of oil refinement, gets about 14% of its rough imports from Iran, according to the “Kepler” data. It is likely that the actual quantities are higher, as some Iranian imports are passed on as consignments from Malaysia as well as from the Emirates and the sultanate of Oman, with the aim of bypassing US sanctions. Although the most important refineries in China try to avoid violation of sanctions, the state as a whole does not recognize unilateral US sanctions. These low price costs are also a lifestyle for private refining companies that are having increasing problems. The fear of the possibility of these charges is increasing, which strengthens the demand for materials that can be loaded from the entity overlooking the Indian Ocean of the Hormuz Street, such as the Emirati “Marbban” and Omani ruol. Other materials may also benefit from any threat to Iranian oil flow, especially the Russian “Espo” ruol, which is carried with the Angolan raw materials from the port of Cosmino in the Far East. Iranian fuel exports, Iran, are not limited to the export of crude oil, but also one of the most important fuel oil exporters, and mainly sells high sulfur species used in marine shipping or as initial material in refineries. A large percentage of these supplies eventually revolve to fuel the supply centers, such as Fujairah in the Emirates, Singapore and Malaysia. Regarding the well -known fuel oil that is extracted directly from distillation, it can be used as an alternative to raw oil, is usually exported to small Chinese refineries with low profit margins, known as “teacupations”. Iran also has large amounts of natural gas, as it shares one of the world’s largest fields with Qatar. While the Islamic Republic consumes most of this gas locally, it exports its derivatives such as LNG (LPG) and conducts condensate abroad. The large plastic sector in China also depends on Iran to provide about a quarter of its liquid oil bag, which is used for cooking and heating purposes, as well as the petrochemical industry that is the basis of plastic material. This accreditation is reinforced after the decline in US supplies that traditionally was the greatest resource of China- due to the trade conflicts that broke out earlier this year. “If Iran’s export of complete oil gas stopping or even in half has decreased, China will only have limited alternatives with real feasibility,” says Samantha Harttek, head of the Market Analysis section for the US region at Fortexa. Iran’s influence on the most important shipping routes passes the vast majority of Asia imports through the street of Hormuz, making it the focus of strategic attention to oil traders. Although Iran may not include the sea street, it can threaten the safety of navigation in the Red Sea, which is the shortest marine path between Asia and Europe- by agents such as the Houthis in Yemen. About 9% of total global maritime trade goes through the Bab Al -Mandab Street, which is more than one trillion dollars annually. This can be reflected in Asia’s supplies coming from Russia, which its exports to the Markets of the East, after facing an increasing isolation of the United States and traditional buyers in 2022 due to the invasion of Ukraine. Fair head in South Africa, and thus facing the ghost of delay in a few weeks.