Pacific Basin Supply Assessment: Impact of Hormuz Closure on Seaborne Crude and Clean Product Flows to Asia
This report assesses the impact of the Strait of Hormuz disruption on seaborne crude oil, dirty petroleum products and clean petroleum products flowing to the Pacific basin. It quantifies the decline in active supply flows, the drawdown of floating storage buffers, and the degree to which alternative origins are substituting for lost Hormuz supply. All data derived from AXSMarine vessel and commodity tracking as of late March 2026.
The closure of the Strait of Hormuz has removed a significant share of seaborne crude and refined product supply flowing to the Pacific basin. Active crude flows have fallen by more than a third. The floating storage buffer that is absorbing the shortfall is being drawn down rapidly. For clean products, the headline decline is smaller — but a near-total collapse in naphtha, the feedstock for Asian petrochemicals, represents a severe secondary shock with no alternative supply source at scale.
Crude supply to the Pacific has fallen 36% — with only 46 days of buffer remaining
311 million barrels of crude and dirty products are currently in transit to the Pacific, down from 487 million pre-crisis. Floating storage is being drawn at 2.05 million barrels per day. At this rate the buffer is exhausted in 46 days.
Naphtha — the feedstock for Asian petrochemicals — has collapsed with no substitute
Naphtha accounted for 57% of pre-crisis clean product flows from the Middle East Gulf. It has fallen to near zero. No alternative supply source appears in the data. Korea is drawing naphtha floating storage at 0.9M bbls, Singapore at 0.7M bbls, with no substitution identified from any origin.
Substitution is underway but covers only 13% of the crude gap and none of the naphtha gap
Russia, Malaysia, India and others are increasing supply to the Pacific. Combined they provide approximately 0.97 million bpd of the 7.74 million bpd lost from Hormuz — 13%. For naphtha the substitution figure is zero.
What was flowing before — and what has been lost
Before the crisis, the Pacific basin was receiving approximately 24 million barrels per day of crude and dirty petroleum products. The Hormuz corridor was the dominant supply route, carrying flows from Saudi Arabia, Iraq, Kuwait, the UAE, Qatar and Iran toward Asian refineries in China, South Korea, Japan, India and South East Asia.
Since the closure on February 28, 2026, total crude flows to the Pacific have fallen to 16.87 million barrels per day — a reduction of 7.40 million barrels per day or 30%. The Arabian Gulf alone accounts for a loss of 214.9 million barrels of in-transit crude, representing 87% of the total decline.
Who is substituting — and how much
Markets are responding. Russia, Malaysia, the USA and Brazil are all increasing flows to the Pacific basin. Yanbu and West Africa are redirecting cargoes eastward. However the combined substitution from all alternative origins amounts to approximately 0.97 million barrels per day — covering only 13% of the 7.74 million barrels per day lost from Hormuz.
The buffer: how much time remains
Floating storage — laden vessels anchored or drifting — currently stands at 95 million barrels across the Pacific basin, down 39% from pre-crisis levels. This buffer is being drawn at 2.05 million barrels per day, giving approximately 46 days of remaining cover at the current drawdown rate.
The drawdown is geographically concentrated. Korea has lost 33.8 million barrels of crude floating storage — the largest single location decline, dominated by Crude Oil (-33.8M) and Non Heat Crude (-29.8M). Shanghai broader region has lost 15.5 million barrels of Non Heat Crude and 12.1 million barrels of Crude Oil. Guangzhou has lost 10.9 million barrels of Non Heat Crude and 8.1 million barrels of Crude Oil. Singapore is the exception — Crude Oil floating storage has fallen by 5.5 million barrels but Dirty product storage has increased by 6.5 million barrels and Fuel Oil by 3.3 million barrels, confirming its role as a regional hub receiving and redistributing diverted cargoes.
The headline understates the problem
Clean petroleum product flows to the Pacific have fallen by 10.67% — a significantly smaller decline than crude. This headline figure suggests relative resilience. It is misleading. The aggregate decline masks a near-total collapse in naphtha — the largest single product in pre-crisis flows — offset by marginal increases in other categories that can be sourced from alternative origins.
Before the crisis, naphtha alone accounted for 57% of all clean product flows from the Middle East Gulf to the Pacific — 800,000 to 1.1 million barrels per day. That flow has fallen to near zero. The Arabian Gulf accounts for -21.0 million barrels of the CPP transit decline with naphtha as the dominant commodity.
What is being substituted — and what cannot be
India and Korea South have emerged as the primary substitution sources for clean products, contributing a combined 0.56 million barrels per day — covering 71% of the 0.79 million bpd Hormuz CPP loss in aggregate volume terms. This substitution is occurring in middle distillates, gasoline blendstocks and jet fuel.
No alternative origin in the substitution data contributes any meaningful naphtha volume. The substitution closing the aggregate CPP gap is occurring entirely in other product categories. The naphtha component of the pre-crisis MEG flow has no identified replacement in the current data.
Naphtha: what the data shows
Naphtha floating storage drawdown since February 28 is concentrated in three locations. Korea has drawn down 0.9 million barrels of Naphtha, 0.9 million barrels of Gas Oil and 0.9 million barrels of Clean — equal drawdown across all three categories indicating broad-based supply pressure. Singapore has drawn down 0.7 million barrels of Naphtha and 0.3 million barrels of Gas Oil, despite accumulating 1.5 million barrels of Clean products from alternative origins. Japan has lost 0.7 million barrels of Clean, 0.4 million barrels of Gas Oil and 0.3 million barrels of Naphtha.
The data shows a clear pattern: no alternative origin in the substitution flows contributes any meaningful naphtha volume. The substitution closing the aggregate CPP gap is occurring entirely in middle distillates, gasoline blendstocks and jet fuel. The naphtha component of the pre-crisis MEG flow has no identified replacement in the current data.
Conclusions and Policy Implications
The Hormuz closure has created two simultaneous but structurally distinct supply crises for the Pacific basin — a crude oil crisis measured in weeks of buffer remaining, and a naphtha crisis measured by the absence of any substitution supply in the data. Each requires a different policy response.
Crude oil: a 46-day window
Pacific crude floating storage stands at 95 million barrels and is declining at 2.05 million barrels per day. At this rate the buffer is exhausted in 46 days. Alternative origins are providing 0.97 million barrels per day of substitution — 13% of the Hormuz shortfall. The remaining 87% cannot be closed by market forces alone within the available timeframe.
Naphtha: no market solution
Naphtha presents a qualitatively different challenge from crude. No alternative supply source appears in the data. India and Korea South — the active CPP substitution providers — contribute zero naphtha in the substitution flow breakdown. Intra-regional redistribution of existing floating stocks is occurring — Korea -0.9M bbls, Singapore -0.7M bbls — but at volumes that cannot sustain pre-crisis consumption rates beyond weeks.
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