The turmoil in energy markets triggered by the Middle East conflict is hitting refined oil products far more severely than crude oil itself. According to a recent report from Goldman Sachs Group, the price increases for refined products such as diesel and jet fuel have significantly outpaced those of crude since the outbreak of hostilities. In certain Asian markets, fuel prices have already doubled. Following Thailand, South Korea has announced restrictions on refined product exports to safeguard domestic supply.
The core of the crisis lies in the structural importance of the Persian Gulf region to the global refining system—it accounts for a key proportion of global exports of medium and heavy crude oil, which are precisely the primary raw materials used to produce diesel, jet fuel, and fuel oil. The near-total disruption of export routes through the Strait of Hormuz has not only cut off crude flows but has also directly impacted global refined product supply chains that depend on Middle Eastern refineries.
Goldman Sachs analysts Yulia Zhestkova Grigsby and Daan Struyven stated in the research report that the current Middle East conflict is the most disruptive event on record for oil markets, with its impact being particularly pronounced in refined products. Since the onset of hostilities, Brent crude prices have risen by more than 40%, surpassing the $100 per barrel mark. However, the increases for various refined products have been even steeper—fuel costs in some Asian markets have doubled compared to pre-conflict levels.
The analysts noted that severe disruptions to medium and heavy crude supplies will lead to reduced output of diesel, jet fuel, and fuel oil. These types of crude are typically used to produce such high-demand products, but alternative sources outside the Middle East are extremely limited.
Goldman's analysis highlights the structural roots of the crisis. The report indicates that approximately 60% of the crude oil typically exported from the Persian Gulf consists of medium and heavy grades, which are key feedstocks for producing diesel, jet fuel, and fuel oil. Outside the Middle East, capacity to provide alternative supplies remains quite limited.
The impact of the conflict is multi-layered: exports of both crude and refined products through the Strait of Hormuz have nearly halted; regional energy infrastructure has come under attack; and oil-producing nations have been forced to cut output, with some refineries also facing operational disruptions. These factors collectively exert systemic pressure on global refined product supplies.
Asian and European markets, which are geographically highly dependent on Persian Gulf supplies, are bearing the brunt of the impact. Goldman data show that Asia imports about 50% of its naphtha from the Persian Gulf, while Europe relies on the region for approximately 40% of its jet fuel supply.
Naphtha, a by-product of refining, is also a key feedstock for chemical manufacturers producing petrochemicals. Goldman warned that the crisis will affect naphtha supply, thereby threatening the stability of related manufacturing supply chains. Reports indicate that naphtha shortages have already posed risks of disruption to Japanese supply chains.
South Korea has followed Thailand in announcing restrictions on refined product exports. The successive implementation of such export control measures indicates that refined product supply tightness is continuing to spread across Asia, with tangible effects on regional fuel distribution patterns.