US Gulf medium sour and heavy sweet grades surged Tuesday to their highest premiums over the Cushing, Oklahoma, benchmark since April 2020, the early days of the Covid-19 pandemic, supported by the near-halt of Middle Eastern exports because of the war in Iran.
Medium sour and heavy sweet crudes have been especially supported by the effective suspension of crude and product exports through the strait of Hormuz following US and Israeli attacks on Iran that began on 28 February, sparking retaliatory strikes from Iran on targets in the region. Much of the disrupted crude is of similar quality to US Gulf grades and the region is also a major exporter of middle distillates, boosting prices for both significantly.
Prompt-month April medium sour Mars traded between $3.75-$5/bl over Domestic Sweet (DSW), while medium sour Southern Green Canyon (SGC) reached a $3/bl premium onTuesday. Distillate-rich Heavy Louisiana Sweet (HLS) rose as high as a $5.25/bl premium. Volume-weighted averages jumped by roughly $1.15-$2.15/bl from the prior session.
These gains came alongside a sharp rise in the Nymex WTI price for DSW, which settled at at $74.56/bl Tuesday, about $7.50/bl higher than on 27 February, the last trading day before the Israeli-US attacks on Iran. Outright assessments for the three grades were between $77-80/bl.
Their premiums have not been higher since April 2020 when differentials rose to partially offset the benchmark price collapse when storage capacity rapidly filled in the wake of Covid-19 related lockdowns and increased Saudi Arabian output.
ME source of 24pc US crude imports
Middle Eastern crudes accounted for about 24pc of all US waterborne crude imports from November 2025-February 2026, according to analytics platform Vortexa, or 587,000 b/d. Of the 277,000 b/d delivered to the US Gulf coast in that time, about 95pc was medium sour.
Of the medium sours, US Gulf coast buyers imported roughly 189,000 b/d of Arab Light and 24,000 b/d of Arab Medium from Saudi Arabia and 51,000 b/d of Iraqi Kirkuk. Kirkuk imports resumed in November after the reopening of the Kirkuk–Ceyhan pipeline. The remaining Middle Eastern crude volumes to the US Gulf coast originated in those two nations or Kuwait.
Total imports of Middle Eastern crude were up by 65pc from the same period a year earlier, alongside the unwinding of Opec+ production cuts and lower relative prices.
National oil companies for Saudi Arabia, Iraq and Kuwait, sell crude to the US at a differential to the Argus Sour Crude Index (ASCI). ASCI is a volume-weighted average of US Gulf deepwater sour crude deals for Mars, Poseidon and SGC.
Rising offshore production had been weighing on US Gulf sours and the ASCI price in recent months, and official selling price differentials have also moved lower, also making US imports from the three countries more economical than in the past.
Additionally, global middle distillate prices have rallied this week, including at the US Gulf coast.US Gulf coast jet fuel prices reached a 29-month high on Tuesday and diesel prices made strong gains.
In contrast to the medium sours and HLS, light sweets WTI Houston and Light Louisiana Sweet (LLS) premiums, although still high, have made smaller gains and are at their highest levels since only last year. US Gulf refiners import little light crude given robust domestic production.
But Asia-Pacific refiners that depend on Abu Dhabi's light sour Murban are looking more to WTI as an alternative, given Murban's surging prices and the difficulty of getting vessel insurance on cargoes in the Mideast Gulf region. Indonesia is considering importing more non-Middle Eastern crude, including from the US, for supply security. But most of its imports from the region are Saudi Arabian medium sours, which could lend further support to the similar US grades.
