Has the oil market reached a 'turning point'?

The global crude oil market stands at a critical juncture. Accelerating inventory drawdowns, a robust return of Chinese demand, and persistent disruptions to Middle Eastern shipping routes—these multiple factors have collectively pushed oil prices above the USD 100-per-barrel threshold. Energy research firm Energy Aspects has characterized the current market as a 'turning point' and warned that prices are entering an 'upward spiral'. Amrita Sen, Founder and Head of Market Intelligence at Energy Aspects, stated in a CNBC interview on September 11 that crude oil prices possess further upside potential, with the prevailing trend pointing upward. She noted that global crude inventories declined by a cumulative 120 million barrels over the past two weeks alone, while China’s crude oil purchases have surged markedly—far exceeding levels seen earlier this spring. According to her prior disclosure to Bloomberg, China’s crude imports in September are expected to reach approximately 10 million barrels per day (bpd), up roughly 3 million bpd from under 7 million bpd in June. Meanwhile, domestic market reactions have also been pronounced. The main contract of Shanghai International Energy Exchange (INE) crude oil futures has climbed above RMB 800 per barrel, and an unusual phenomenon has emerged: domestic crude futures prices have surpassed Brent crude futures prices—reflecting significantly more aggressive domestic pricing of supply tightness. In response, China’s regulatory authorities swiftly acted: the Shanghai Futures Exchange (SHFE) issued a notice on September 11 announcing increased daily price limits and margin requirements for relevant crude oil and low-sulfur fuel oil futures contracts, effective from the close of trading on September 14, to strengthen risk management. China’s demand rebound emerges as the core driver behind rising oil prices China is one of the pivotal variables behind this round of oil price increases. In June, China’s crude oil imports stood at under 7 million bpd—a figure that had raised market concerns about demand prospects. Yet this situation has undergone a clear reversal recently. According to Amrita Sen’s disclosure to Bloomberg, China’s crude imports in September are projected to reach around 10 million bpd—approximately 3 million bpd higher than in June, representing nearly a 45% increase. This strong demand rebound, coupled with accelerating global inventory drawdowns, has jointly propelled oil prices upward beyond key thresholds. During this period, Shanghai crude oil futures prices surged sharply—directly reflecting on the futures market China’s re-emergence as a major demand player. Persistent risks in the Strait of Hormuz keep supply-side pressure unabated Geopolitical risk remains another fundamental pillar supporting current oil prices. Escalating tensions in the Middle East—particularly threats to shipping through the Strait of Hormuz—are exerting tangible pressure on crude supplies to Asian refiners. Amrita Sen pointed out that oil flow through the Strait of Hormuz briefly rebounded in August, but as regional tensions flared again, shippers resumed exercising caution. She warned that if cancellations and delays at the Strait persist, Asian refiners will have no choice but to cut refinery runs. According to reports by Shangguan News, fighting between Yemen’s Houthi forces and the Saudi-led coalition has intensified across multiple fronts; Saudi Arabia itself suffered attacks, marking a significant escalation in Yemen’s conflict—and serving as the immediate catalyst for the recent sharp rise in international oil prices. On September 10, NYMEX WTI crude futures surged 6.69% to close at USD 102.48 per barrel; London-traded Brent crude rose 6.34% to USD 107.63 per barrel—both hitting their highest levels since May 19 and registering their largest single-day gains in nearly two months.

Reports indicate the U.S. and Iran are exploring a phased resumption of shipping through the Strait of Hormuz—crude prices quickly halve their earlier gains.

Media outlets identified two primary drivers behind Thursday’s intraday oil price rebound: first, market perceptions that U.S.-Iran diplomatic negotiations have made limited progress; second, missile launches by Yemen’s Houthi forces against Saudi Arabia. According to Xinhua News Agency, the Saudi-led coalition announced on the 24th that it had intercepted six missiles launched by Yemen’s Houthi forces. U.S.-Iran exploration of a 'Strait-for-Unfreezing' deal revealed Reuters reported that a senior Iranian official stated the most viable path to breaking the current negotiation deadlock is a phased arrangement: Iran would permit vessel passage through the Strait of Hormuz in exchange for the United States lifting its economic sanctions on Iran—and possibly unfreezing previously frozen Iranian assets. This implies that the Strait of Hormuz’s reopening could become a pivotal bargaining chip in U.S.-Iran negotiations. Citing sources, Reuters noted that a major obstacle currently facing the talks is that neither side is willing to unilaterally relinquish its leverage. Iran seeks to trade freedom of navigation through the Strait for relief from U.S. economic pressure, whereas the U.S. aims to ensure the restoration of stable, unrestricted shipping through this globally vital oil transit corridor. Under this phased proposal, Iran might first allow vessels to gradually resume passage through the Strait, while the U.S. would reciprocate by lifting economic sanctions and other measures. Iran may also recover frozen assets. However, Reuters emphasized that this remains only a proposal under discussion—not yet an agreed-upon deal—and that substantial differences still persist between the two sides. The aforementioned senior Iranian official stated that Iran seeks a diplomatic resolution but is simultaneously preparing for potential new conflict with the United States, accusing Washington of using economic sanctions and military threats as coercive tools. The official said: “We are ready to go to war at any moment. The Americans know what they must do—but because their demands are excessively high, the likelihood of resolving this issue diplomatically is extremely low.” Additionally, Gulf-based sources revealed that Iran is willing to drop its demand for formal inclusion of a Strait-of-Hormuz transit fee in the main agreement, instead relegating it to supplementary clauses—since lifting sanctions has become the more urgent priority. Gulf states have already rejected proposals regarding such fees. Regional sources indicated that any such arrangement would be temporary and would not signify Iran’s formal abandonment of its established position. Why did oil prices surge earlier? Prior to Reuters’ report above, international oil prices had already rebounded for a second consecutive trading day on Thursday. Previously, international crude futures had closed lower for five straight trading days. On Thursday, however, amid renewed escalation of geopolitical risks, prices surged notably—intraday gains for both WTI and Brent crude briefly approached 5%. A key contextual factor was the market’s perception that U.S.-Iran diplomatic negotiations had yielded limited progress—implying that supply risks linked to the Strait of Hormuz could persist longer than anticipated. The Wall Street Journal, when referencing the intraday oil price surge, cited 'limited progress in U.S.-Iran diplomacy' as one of the key background factors driving the rally. Reuters’ same-day report likewise noted that oil prices rose to their highest intraday levels in a week, driven by both Houthi missile launches against Saudi Arabia and the lack of visible progress in U.S.-Iran diplomatic talks. According to Xinhua News Agency, Turki al-Maliki, spokesperson for the Saudi-led multinational coalition, stated on social media on the 24th that the coalition had intercepted and destroyed six ballistic missiles launched by Yemen’s Houthi forces—targeting the Saudi cities of Taif and Yanbu.

Oil prices rise for second session on continued Middle East supply concern

Sep 28, 2026

Oil prices rose for a second session amid Middle East supply concerns linked to US-Iran conflict, with Brent hitting $105.91 per barrel. Concurrently, the US considers regulatory relief for red-dyed diesel to mitigate price pressures.

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Oil prices rise for second session on continued Middle East supply concern

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