Asia's Oil Hunt Rewrites Trade Maps

At least 60 million barrels of U.S. crude headed to Asia in May—the highest level in three years , according to traders familiar with the matter. Crude oil shipments bypassing the Strait of Hormuz began arriving in Japan from May, industry ministry officials said . The scramble is on. And it's remaking the global energy map faster than anyone expected.

Iran has largely blocked shipping traffic through the Strait of Hormuz since February 28, when the United States and Israel launched an air war against Iran . Over 90% of Japan's oil imports have come from the Middle East , most through that 34-mile chokepoint. Now those flows have stalled, forcing Asia's energy-hungry economies to hunt for barrels anywhere they can find them. The result: a geopolitical energy realignment that's handing leverage to Moscow, Washington, and Beijing in ways that will outlast any ceasefire.

Can Russia Actually Benefit From a War It Didn't Start?

The math looks brutal at first glance. Russia's oil and gas budget revenues fell 38.3% year-on-year in the first four months of 2026, dropping to 2.298 trillion rubles (about $30.95 billion) , according to the Russian Ministry of Finance. Ukrainian drone attacks have knocked out about 40% of Russia's oil export capacity, disrupting shipments from major Baltic and Black Sea ports—what Reuters called the "most severe oil supply disruption" in modern Russian history .

Yet Moscow is still winning. Russia's oil and gas revenues are likely to rise in May due to higher oil prices driven by the war in Iran, Reuters reports . The agency forecasts that Russia's revenues from oil and gas taxes in May will amount to about 650 billion rubles ($8.65 billion), compared to 512.7 billion rubles ($6.85 billion) in the same month of 2025 . Although Ukrainian strikes have led to a noticeable decline in the physical volume of Russian oil exports, the rise in prices has more than made up for it , according to Carnegie Endowment analysis.

In April 2026, China remained the largest global buyer of Russian fossil fuels, accounting for 41% (EUR 7.3 billion) of Russia's export revenues from the top five importers, with crude oil making up 75% (EUR 5.5 billion) of China's purchases , the Centre for Research on Energy and Clean Air reported. China's imports of Russian oil jumped 35% year over year in the first quarter , according to official customs data. When your competitors' supply routes are blocked, even a damaged export machine looks attractive.

Does Beijing Hold All the Cards on Power of Siberia 2?

Russian President Vladimir Putin met with Chinese leader Xi Jinping in Beijing on Wednesday, with the long-stalled Power of Siberia 2 natural gas pipeline on the agenda, Kremlin foreign policy aide Yuri Ushakov said . The planned 2,600-kilometer pipeline would carry 50 billion cubic meters of gas annually from Russia's Yamal fields to China via Mongolia, and Moscow and Beijing signed a legally binding memorandum to advance construction .

But pricing, financing terms, and a delivery timeline remain unresolved. China reportedly wanted pricing terms for the new pipeline to match Russia's domestic rate of around $120-130 per 1,000 cubic meters, while Moscow is seeking terms closer to Power of Siberia 1, which analysts estimate would more than double that figure . Putin made no mention of the Power of Siberia 2 pipeline at the joint press conference, but Kremlin Press Secretary Dmitry Peskov later said Russia and China had "reached an understanding on the project's main parameters" .

Translation: no deal yet. The first Power of Siberia pipeline took about 20 years to come into being, and the Chinese drive a hard bargain on price—on this second pipeline the story will be no different, the cards will all be in China's hands , said Natasha Kuhrt, lecturer in international peace and security at King's College London. Power of Siberia 2 would add another 50 billion cubic meters of annual capacity and could double Russia's share of China's gas supply from around 10% to about 20% of total consumption . That's enormous leverage for Beijing to extract concessions Moscow can't afford to refuse.

What About America's LNG Comeback?

US President Donald Trump said China wants to buy oil, LNG and other goods from the US following discussions with China's President Xi Jinping in Beijing, though there was no formal announcement of a trade deal during the visit, which concluded May 15 , S&P Global reported. Three U.S. LNG vessels left Cheniere Energy's Sabine Pass and Venture Global's Plaquemines plants in early May and were expected to arrive in China's Tianjin port between June 15 and 20 , according to LSEG data.

If they arrive, it would mark a stunning reversal. US liquefied natural gas exports to China fell off a cliff in 2025, dropping from 4.15 million tonnes in 2024 to just 26,000 tonnes, a 99.4% decline that essentially erased one of the largest energy trade corridors on the planet . China has not imported any U.S. oil since May 2025 due to a 20% import tariff imposed during the trade war , according to China customs data.

The Hormuz crisis changes the calculus. China is a major recipient of LNG sourced from Qatar, accounting for about 28% of the country's total LNG imports in 2025 . With Qatari cargoes now stranded or rerouted, American molecules suddenly look more attractive—even at a premium. A resumption of US LNG exports to China would not likely impact prices or supply-demand balances significantly in the near-term, according to S&P Global Energy CERA LNG analysts, as China's demand in 2026 has been low, with the country importing less than its full contract volumes .

Who's Watching the Oil Futures?

The Commodity Futures Trading Commission is scrutinizing a spike in oil futures trading that happened just before President Donald Trump postponed strikes on Iran's energy infrastructure in March , The Wall Street Journal reported. On March 23, traders placed roughly $500 to $580 million in Brent and WTI crude oil futures contracts between 6:49 and 6:50 a.m. ET—approximately 15 minutes before Trump posted on Truth Social about productive talks with Iran to de-escalate tensions—and oil prices dropped sharply afterward .

The trading volume at that hour was roughly nine times the average for that time of day , according to CBS News. The Justice Department and the CFTC are looking into at least four trades in which the traders made a total of more than $2.6 billion betting that oil prices would drop right before they did, with the trades placed in March and April , a person familiar with the matter told NBC News. No charges have been filed, but the investigation adds another layer of uncertainty to markets already whipsawed by geopolitics.

What Changed This Week

Two supertankers loaded with crude oil exited the Strait of Hormuz on Tuesday and are heading to China, carrying Iraqi and some Qatari crude loaded in late February and early March , Reuters reported. It's a trickle, not a flood—but it signals Iran may be selectively easing its chokehold. Meanwhile, Asian refiners have grown increasingly reliant on U.S. crude as oil-starved fuel makers scour the globe to replace Middle Eastern supply, with buyers in Japan leading the charge to purchase May-loading cargoes from the U.S. The energy map is being redrawn in real time, and the new routes may prove stickier than anyone expects.

What to Watch

Putin and Xi's "understanding" on Power of Siberia 2 will be tested by whether actual construction begins in the coming months—or whether Beijing continues to slow-roll negotiations while extracting better terms. Watch for U.S. LNG cargoes actually discharging in Chinese ports in mid-June; if they don't arrive, the Trump-Xi energy détente is theater, not substance. And keep an eye on Japanese import data through summer: "Our efforts to procure crude oil from alternative sources have been progressing steadily," an industry ministry official said , but the real test comes when refineries need to run at full capacity during peak driving season. The Hormuz crisis may ease. The new supply chains it's creating won't.