Asian Refining Margins Turn Negative Amid Iran Disruption

Asian Refining Margins Turn Negative

News: Asian refining margins have turned negative as the Iran conflict disrupts crude supply chains and raises costs.

Singapore benchmark GRMs have dropped from $40–45 per barrel to between -$5 and -$10, reflecting a sharp reversal in profitability. Disruptions around the Strait of Hormuz have led to feedstock shortages, forcing refiners across Asia to cut operating rates.

Freight costs have surged sharply due to rerouting and war-risk premiums, significantly increasing crude landing costs.

At the same time, weakening fuel demand across Asia—driven by high prices and slower industrial activity—is further pressuring margins. Indian refiners are also impacted due to reliance on Middle Eastern crude, with rising volatility and shrinking export opportunities squeezing profitability.