The global crude market is at a decisive juncture, with accelerating inventory drawdowns, a resurgence in Chinese demand, and sustained disruptions in Middle Eastern shipping routes combining to push oil prices past the $100-per-barrel threshold. Energy Aspects has characterized the current environment as an inflection point, cautioning that prices are entering an upward spiral.

Amrita Sen, founder and director of market intelligence at Energy Aspects, told CNBC on September 11 that crude prices have room to climb further, with the trend firmly pointing higher. She noted that global crude inventories have drawn down by a combined 120 million barrels over the past two weeks, while China's crude purchasing activity has rebounded sharply to levels far exceeding those seen in the spring. According to figures she previously shared with Bloomberg, China's September crude imports are projected at roughly 10 million barrels per day, up about 3 million barrels per day from the under-7-million-barrel level recorded in June.

The ripple effects are equally pronounced in the domestic market. The main contract for crude futures on the Shanghai International Energy Exchange has climbed above 800 yuan per barrel, with the unusual scenario of domestic crude futures prices surpassing Brent futures, signaling that the local market is pricing supply tightness more aggressively. Chinese regulators responded swiftly, with the Shanghai Futures Exchange issuing a notice on September 11 to raise price limits and margin requirements for certain crude and low-sulfur fuel oil futures contracts from the close of settlement on September 14, aimed at reinforcing risk controls.

China's Demand Rebound Emerges as Core Driver of Price Upside

The China factor is a key variable in the current rally. In June, Chinese crude imports dipped below 7 million barrels per day, raising doubts about demand prospects. However, that picture has reversed markedly in recent weeks.

As Amrita Sen told Bloomberg, China's September crude imports are expected to reach about 10 million barrels per day, roughly 3 million barrels per day higher than June's level, an increase of nearly 45%. This demand resurgence, combined with the accelerating global inventory drawdown, has formed a powerful tandem that is lifting prices. The sharp jump in Shanghai crude futures during this period directly reflects China's return to the demand market in the futures complex.

Strait of Hormuz Risks Persist, Keeping Supply-Side Pressure Intact

Geopolitical risk is another core pillar supporting current oil prices. The escalating situation in the Middle East, particularly shipping threats in the Strait of Hormuz, is delivering a tangible blow to crude supplies for Asian refiners.

Sen noted that oil flows through the Strait of Hormuz briefly recovered in August, but shipping operators have turned cautious again as tensions have reignited. She warned that if cancellations and delays in the strait persist, Asian refiners will have no choice but to cut processing runs. According to reports, Yemen's Houthi forces have clashed with the Saudi-led coalition on multiple fronts, with Saudi Arabia coming under attack, marking a significant escalation in Yemen that has served as the direct trigger for the latest surge in international oil prices.

On September 10, WTI crude futures on the New York Mercantile Exchange jumped 6.69% to settle at $102.48 per barrel, while London's Brent crude futures rose 6.34% to close at $107.63 per barrel. Both touched their highest levels since May 19 and posted their largest single-day gains in nearly two months. Although prices pulled back about 3% on Friday (September 11) amid chatter of a temporary Hormuz agreement, both Brent and WTI still posted weekly gains of more than 9%, marking a second consecutive week of gains exceeding that threshold.

Refined Products Market: Quieter Than Crude, But More Dangerous Pressure

If the crude price rally has drawn broad attention, the tightness in the refined products market runs even deeper.

According to the International Energy Agency (IEA), the rise in crude prices pales in comparison to gains in refined products, with the most strained segment of the market currently being refined fuels. The combination of disrupted shipping through the Strait of Hormuz and Ukrainian strikes on Russian refining facilities has created a dual shock, putting far more pressure on refined product supplies than on crude itself. The U.S. national average retail diesel price broke above $6 per gallon for the first time on Thursday. Energy policy advisor Kate Gordon noted that fuel costs account for up to 30% of U.S. food costs, adding that farmers and trucking companies are already absorbing substantial cost increases, but as the conflict drags on, they will increasingly pass those price pressures on to consumers.

The IEA report also indicated that the stalemate in U.S.-Iran negotiations has pushed any normalization of crude flows into next year, with oil demand projected to rebound in 2027, barely offsetting this year's losses. The market remains in a steep backwardation structure, signaling that traders are betting on some form of policy intervention from the White House to ease price pressures. Analysts argue that with diesel prices soaring and transit volumes through the Strait of Hormuz falling to single digits, the transmission path of inflationary pressure to next week's Federal Reserve policy meeting is now clearly visible.

Meanwhile, OPEC has once again downgraded its 2026 demand growth forecast to 380,000 barrels per day, but the physical market appears unconvinced, with Dated Brent briefly breaching $120 per barrel before Friday's pullback.

Domestic Market Linkages: Futures Price Anomalies and Regulatory Intervention

The violent swings in international oil prices have transmitted rapidly to the domestic market, triggering a series of regulatory responses.

Since the start of September, main continuous contracts for both Brent and WTI crude futures have each gained more than 17%, while the domestic crude futures main contract has also risen above 800 yuan per barrel. Notably, domestic crude futures prices at one point exceeded Brent futures prices, an unusual spread structure that reflects how fully the local market has priced in supply tightness expectations. On the risk-control front, the Shanghai International Energy Exchange issued a notice on September 11, adjusting price limits to 16% for crude futures contracts SC2610 and SC2611, as well as low-sulfur fuel oil futures contracts LU2610 and LU2611, effective from the close of settlement on September 14, 2026. Hedge position margin requirements were set at 17%, while general position margin requirements were raised to 18%.

On the refined product pricing side, the National Development and Reform Commission announced temporary control measures for domestic refined product prices effective at 24:00 on September 11. Under the current pricing mechanism, gasoline and diesel prices were slated to rise by 435 yuan and 420 yuan per ton respectively, but after adjustment, the actual increases were capped at 260 yuan and 250 yuan per ton. This marks the third instance of temporary price controls on refined products this year, following earlier measures on March 23 and April 7, all of which were implemented against the backdrop of abnormal spikes in international oil prices.