Strait of Hormuz Turmoil Escalates, Japan Buys Canadian Crude
Global supply disruptions push Brent above $92, as Asian buyers seek alternatives to Middle East oil, potentially benefiting North American producers.
Iran's Islamic Revolutionary Guard Corps (IRGC) said on Thursday that two oil tankers attempting to transit the Strait of Hormuz with U.S. support turned back after one caught fire, according to a report from OilPrice.com. The IRGC declared the Strait "our territory" and stated it "cannot be reopened" while U.S. threats continue.
Most ships, including tankers, are now attempting to navigate the strait in "dark mode" with transponders off to avoid detection, OilPrice.com reported. This latest incident follows a wave of U.S. strikes against IRGC targets on Wednesday, in response to Iranian missile attacks on U.S. forces. The ongoing turmoil sent Brent crude prices above $92 per barrel early Thursday, a jump of 1.5%.
In a related development, QatarEnergy successfully sent an LNG cargo through the Strait of Hormuz on Thursday, its first such passage in three weeks since one of its carriers was struck there, OilPrice.com reported, citing Bloomberg. The vessel, bound for Pakistan, crossed with its geolocation devices turned on. QatarEnergy had declared force majeure in March due to the conflict, recently extending it until October, and estimates damage to its Ras Laffan LNG complex will cost $20 billion annually in lost revenue.
The persistent instability is reshaping global oil trade flows. Japan's biggest refiner, Eneos, has bought a rare cargo of Canadian crude, its first such purchase since 2025, OilPrice.com reported, citing Reuters. The 750,000-barrel cargo, sold by Exxon, was loaded onto an Aframax tanker.
"Japan's renewed purchases of TMX crude highlight Canada's growing role in Asia's evolving import strategy as refiners diversify away from Middle East Gulf supplies," said Kpler senior analyst Richard Ro, according to the report. Prior to the war, Japan sourced over 90% of its crude from the Middle East.
The oil is being exported via the Trans Mountain Expansion (TMX) pipeline to the British Columbia coast, which has operated at double its 890,000-barrels-per-day capacity since 2024. Reuters data shows 77% of oil exports from Vancouver have gone to Asia this year, up from 51% in 2024. Trans Mountain Corp. has plans to potentially boost the pipeline's capacity further to 1.2 million barrels daily.
Source
According to reports from OilPrice.com.
