International oil prices experienced a rapid surge on the evening of March 6, with WTI crude approaching $85 per barrel and Brent crude surpassing $87, reaching new highs since April and July 2024, respectively.
Amid escalating geopolitical tensions, international crude oil prices have continued to climb, with further increases considered likely. Goldman Sachs has cautioned that developments in the coming weeks could determine the trajectory of global oil prices for an extended period. A prolonged closure of the Strait of Hormuz could push international oil prices above the $100 per barrel threshold.
As the second-largest OPEC producer, Iraq has begun shutting down its largest oilfield, Rumaila, and the West Qurna 2 project. Approximately 1.2 million barrels per day of production capacity were idled as of March 3. If fully implemented, these shutdowns would disrupt the majority of Iraq's crude output. If tankers remain unable to navigate the Strait of Hormuz freely and reach loading ports, Iraq could be forced to implement deeper production cuts exceeding 3 million barrels per day within days.
Domestic refined oil product retail prices are expected to follow the upward trend of international crude prices. China's domestic fuel pricing mechanism does not adjust instantly with international crude fluctuations but follows a ten-working-day cycle. Retail price ceilings are raised if the average international crude price over the previous ten working days increases beyond a set threshold.
The last adjustment occurred on February 24, when gasoline and diesel retail prices increased by 175 yuan and 170 yuan per ton, respectively. The next pricing window is scheduled for March 9. As of March 6, the ninth working day of the cycle, Brent crude's rise corresponded to an 11.35% change rate, indicating a projected increase of 500 yuan per ton for gasoline and diesel. This translates to increases of 0.39 yuan per liter for 92# gasoline, 0.41 yuan for 95# gasoline, and 0.42 yuan for 0# diesel, marking the largest increase so far this year.
By next Monday, March 9, which is the tenth working day, fuel costs for private vehicle use and logistics transportation are anticipated to rise.
Additionally, Dai Tiandong, a refined oil analyst at Zhuochuang Information, noted that recent increases in domestic wholesale prices have raised cost bases, narrowing the wholesale-retail spread for gasoline and diesel and reducing theoretical profit margins for gas stations. In regions like North China, point-specific discounts at certain Sinopec and PetroChina stations have persisted but are narrowing, ranging from 0.3 to 0.5 yuan per liter. Discounts at private stations have also decreased, now typically between 0.6 and 1.3 yuan per liter.