Key facts
- Oil prices surged over $4 a barrel on Thursday.
- Brent crude oil prices briefly topped $100 a barrel.
- China has suspended oil product exports for October.
- US troop deployments to the Middle East are increasing.
- Diesel prices in the US have reached record highs.
Oil prices jumped more than $4 a barrel on Thursday, with Brent crude briefly surpassing $100, as reports emerged of China suspending fuel exports and the US increasing troop presence in the Middle East. The surge was further fueled by concerns over global fuel shortages and market volatility.
According to Reuters, Chinese refiners have halted fuel exports for October to conserve domestic oil stocks. This move is expected to put additional pressure on a global refined products market already facing supply constraints. Anindya Banerjee, head of research at Kotek Neo's currencies and commodities desk, stated that if Chinese barrels disappear from the export market, buyers will have to compete for a smaller supply.
China's decision comes as the country, a major refining hub, enters a week-long holiday. For October, refiners are only permitted to ship products to Macau and Hong Kong. This export pause could provide a floor for crude prices, especially as Middle East oil flows have largely recovered from previous disruptions.
The implications are particularly significant for diesel and jet fuel markets, which are already experiencing high prices. PetroChina, China's state-run oil major, has reportedly canceled several planned October shipments of jet fuel and gasoline. Bank of America described the surge in US diesel prices as a "real economy pressure point," impacting shipping and freight industries.
President Donald Trump also indicated that he was considering his options regarding Iran, adding to the geopolitical uncertainty and market volatility.