Spot premiums for physical crude have fallen from the record highs that appeared earlier this month as refiners cut runs and draw on inventories to compensate for the loss of Middle East supply caused by the near‑total closure of the Strait of Hormuz. Since the U.S.–Israeli war on Iran began on February 28, analysts at Citi estimate that the global market has lost access to 500 million barrels of crude and refined products. The shortfall has driven a 15‑million‑barrel‑per‑day loss in Middle East output, a disruption that is still expected to keep prices elevated. Premiums for African, U.S. and Brazilian grades once topped $30 a barrel, but have eased as refiners shift to previously sanctioned barrels. For example, Sinopec drew about 1 million bpd from reserves between April and June, allowing its trading arm Unipec to sell West African, Brazilian and Canadian cargoes on the spot market. PetroChina and CNOOC also sold Canadian crude from the Trans Mountain pipeline this month. Premiums for European and West African crude fell to below $10 a barrel on Ekofisk and to $7.75 a barrel for Forcados, Bonny Light and Qua Iboe, down from just over $10 a barrel in mid‑April. Brazilian grades, which had surged past $30 a barrel earlier, are now trading at $8–$9 a barrel to dated Brent for Formosa Petrochemical’s 2 million‑barrel purchase, while Indian refiners are buying at nearly $5 a barrel. Analysts note that the easing of premiums reflects a shift from panic buying to selective procurement. “Asian demand is starting to ease as refiners cut runs, shifting the market away from panic buying and toward more selective procurement, with Russian barrels dominating incremental demand,” said a Kpler analyst. June Goh of Sparta Commodities added that the correction brings prices back to “affordable” levels, though she cautioned that premiums would remain above pre‑crisis levels. Morgan Stanley estimates that demand destruction could reach 4.3 million bpd in the second quarter, potentially triggering an 800 k bpd decline in total 2026 oil consumption. With strategic reserve releases and inventory drawdowns providing only a partial buffer, the prolonged disruption from the Strait of Hormuz is likely to keep upward pressure on spot crude premiums, but the recent easing suggests that the market is stabilising as refiners adjust output and sourcing strategies.