June 18th News
The latest adjustment window for China's refined oil prices will open at 24:00 on June 18. The retail price of refined oil will be reduced again. In 2026, the retail price of refined oil in China will have experienced eight increases, three decreases, and one suspension. During this cycle, the trend of crude oil prices has declined, and the change rate of crude oil has remained negative, leading to the "third" reduction in the retail price of refined oil.
As we enter this pricing cycle, international oil prices have begun to decline. As of the 17th, the settlement price for the July WTI crude oil futures contract stood at $76.79 per barrel, while the settlement price for the August Brent crude oil futures contract was $79.55 per barrel. During this pricing cycle, crude oil prices have shown a downward trend, primarily due to the substantial easing of geopolitical tensions between the U.S. and Iran. The two sides have reached a memorandum of understanding, raising expectations that navigation through the Strait of Hormuz could soon resume, which has led to a rapid erosion of the risk premium supporting oil prices. However, compared to this short-term correction driven by geopolitical sentiment, the underlying fundamentals—tight global crude oil inventories—have yet to reverse their current tightness. This remains the key factor underpinning the floor for oil prices, suggesting that the current downturn is likely to be a temporary adjustment rather than a sustained reversal in the overall trend. As of the 18th, on the 10th working day, the change rate for crude oil varieties was -10.4%, corresponding to a reduction of RMB 515 and RMB 495 per ton for gasoline and diesel in China, respectively. Converted into per-liter prices, this translates to a decrease of RMB 0.39 per liter for No. 92 gasoline, RMB 0.42 per liter for No. 95 gasoline, and RMB 0.42 per liter for No. 0 diesel.
Gasoline: Recently, Chinese refineries have reduced their load, leading to a slight decrease in refined oil production. The operating rate of Shandong's independent refineries remains above 50%, and the supply of refined oil products in China is sufficient. Additionally, gasoline and diesel inventories in China are at high levels, with Shandong's independent refineries and major companies' inventories reaching relatively high levels for the year. Market participants are mainly adopting a wait-and-see attitude, resulting in a lukewarm overall buying and selling performance, and a decline in gasoline market prices. Moreover, with recent normal resident travel and other activities, the increasing popularity of new energy vehicles has led to lower-than-expected demand. Affected by these negative factors, the gasoline market trend has declined.
In the diesel market: Recently, the supply of diesel in China has decreased. Demand from logistics has been normal, and construction sites and projects across the country have gradually resumed operations, leading to a gradual recovery in diesel demand. However, the willingness of downstream buyers to purchase has weakened, and there is low interest in buying diesel at high prices. After the rapid increase in diesel prices earlier, the profit margins of gas stations have been severely squeezed, resulting in less active procurement. Additionally, with the start of the fishing moratorium in southern China, the demand for diesel has decreased. Overall, the market price trend for diesel is declining.
Looking ahead, the current oil price trend exhibits a divergent pattern: short-term pressure coexisting with medium- and long-term supply-and-demand dynamics that provide firm support. In the short term, as U.S.-Iran reconciliation and expectations of resuming navigation through the Strait of Hormuz continue to gain traction, geopolitical risk premiums are set to further dissipate. As a result, oil prices will likely remain volatile and tend to weaken, with the market continuing to closely watch the pace of reopening shipping lanes and the timing of increased crude oil supply. From China’s perspective, refinery operating rates are expected to remain largely unchanged in the near term, and refined oil supplies will stay normal. Consequently, we anticipate that the short-term trend for gasoline and diesel prices will predominantly show a downward trajectory in the coming period.
