Major oil refiners in China and Japan are considering slashing crude processing rates by 20% to 30% in response to escalating regional tensions. The potential cuts follow the effective closure of the Strait of Hormuz due to conflict in Iran, which has trapped millions of barrels of crude oil in transit. This physical blockage has prevented refiners from receiving essential feedstock, despite Saudi Arabia recently lowering official selling prices to five-year lows. Analysts suggest that this disruption at the world's most vital oil chokepoint represents a massive supply-side shock that threatens regional economic stability. Consequently, market participants expect significant upward pressure on Brent and WTI benchmarks as refining capacity in Asia faces unprecedented operational constraints.
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