Spot premiums for physical crude have slipped from record highs reached earlier during the Iran war as refiners are drawing on inventories and ​cutting back processing to cope with lost Middle East supply, Reuters reports, citing traders and analysts.

Since the US-Israeli war on Iran that began on February 28 caused the ‌near-total closure of the Strait of Hormuz, the global market has lost access to 500 million barrels of crude and refined products output, according to analysts at Citi. That sparked surging prices on panic buying, but the higher prices have destroyed demand from consumers and refiners.

Scouring the globe for replacements, refiners paid up, pushing premiums for barrels from Africa, the US and Brazil, with some grades reaching record highs of more than $30 a barrel earlier ​this month.

However, premiums are easing as refiners are opting to reduce output and home in on previously sanctioned barrels, while Chinese state majors Sinopec and PetroChina tap commercial reserves ​and sell spot market crude.