Asian refiners and traders are stepping back from Middle Eastern crude oil, halting a recent wave of purchases that had temporarily tightened the physical market.
Industry sources indicate that available cargoes now require significantly deeper discounts to attract buyers, suggesting that the initial surge in demand has been fully absorbed.
The shift comes as global physical crude markets continue to trade at widening discounts.
A surge in supply from the Middle East, driven largely by aggressive export ramp-ups from Iran, is overwhelming current regional demand.
The imbalance has forced sellers to compete more fiercely for limited buyer interest, eroding the premium on immediate availability.
This development follows a period where Asian equity markets retreated amid waning confidence in a potential US-Iran peace agreement.