September 10th, News
On Wednesday, September 9, the international crude oil market once again witnessed a strong rally. The ongoing escalation of geopolitical tensions in the Middle East has completely reversed earlier market expectations of a de-escalation of conflicts. Brent crude oil futures surged strongly above the psychological threshold of $100 per barrel, while both Brent and WTI crude oils simultaneously reached their highest closing levels since late May, driving a significant increase in the geopolitical risk premium. In the refined oil sector, a clear divergence emerged: heating oil prices soared sharply amid growing concerns about crude oil supply, while gasoline prices saw a slight pullback. The energy commodity market is exhibiting pronounced structural characteristics.
I. Market Performance: Brent crude oil strongly breaks through the $100 mark, with a clear structural divergence among energy commodities.
As of the close at 2:30 p.m. New York time on September 9 (2:30 a.m. Beijing time on September 10), NYMEX October WTI crude oil futures rose by $3.02, representing a price increase of 3.25%, with the settlement price reaching $96.05 per barrel. Meanwhile, ICE November Brent crude oil futures climbed by $3.29, marking a price increase of 3.40% and settling at $101.21 per barrel. Both benchmark crude oil contracts hit their highest closing levels since May 22, returning to the “$100 era” for the first time in nearly four months.
Finished oil contracts: October RBOB gasoline futures fell slightly by 4.19 cents, a price decrease of 1.29%, with the settlement price at $3.2106 per gallon; October heating oil futures surged significantly by 23.32 cents, a price increase of 5.11%, settling at $4.8010 per gallon. The sharp rise in heating oil prices underscores market concerns about potential energy supply shortages this winter, in stark contrast to the typically weak demand trend for gasoline during the off-season.
II. Trend Analysis: Rising Conflict Expectations Combined with Favorable Supply and Demand Conditions Reshape the High Oil Price Environment
1 US-Iran Maritime Conflict Escalates, Comprehensive Restructuring of Geopolitical Pricing Logic
The core driver of this round of oil prices breaking the hundred-dollar mark is the escalation of Middle Eastern geopolitical conflicts from "intermittent friction" to a "continuous cycle of retaliation." The market has completely overturned its previous expectation of "low-intensity conflict and controllable supply," and is now repricing the risk of long-term energy supply disruptions.
Recently, the maritime confrontation between the U.S. and Iran has continued to escalate, with the intensity of the conflict steadily rising. On the 8th, the U.S. military destroyed five Iranian tankers following an Iranian attack on a U.S. warship; on the 9th, Iran’s Islamic Revolutionary Guard Corps launched a strong counterattack, striking two U.S. warships, eight oil tankers, and ten vessels found to be in violation of regulations. Although the U.S. side denied that its ships had been attacked, the pattern of reciprocal retaliation between the two sides has now taken shape, significantly heightening regional shipping safety risks. Market analysts point out that Brent crude oil breaking through the $100 mark signifies that the market has completely revised its expectations regarding the duration of the Middle East crisis and the severity of supply restrictions, marking the beginning of a systematic rise in geopolitical risk premiums.
On that day, Trump's statement released an expectation of a special time window. He publicly stated that the US-Iran conflict would end after the US midterm elections in November. The pace of oil price decline would lag behind the end of the conflict, but oil prices would see a significant drop after the conflict ends. This statement provided the market with short-term emotional support and a long-term bearish expectation, forming a two-way pricing pattern of "short-term risk surging and mid-term expectation of a decline."
2 Straits Navigation Continues to be Depressed, Supply Disruptions Become Normalized
Ongoing geopolitical conflicts continue to erode the efficiency of shipping through the strait, while tightening physical supply provides solid bottom support for oil prices. According to Kpler shipping data, only six bulk-cargo vessels transited the Strait of Hormuz on Tuesday, a further decline from the nine vessels recorded the previous day and significantly below the 10-day average of 12 vessels. Capacity in the strait remains persistently contracted.
It is worth noting that this round of futures price increases is not driven by speculative hype but rather closely reflects the fundamentals of the physical market. Since September 3, the spot Brent crude oil price—the global pricing benchmark—has consistently remained above $100 per barrel, while physical prices for refined petroleum products have long been hovering around the $100 mark. The refining bottlenecks triggered by regional conflicts continue to intensify, pushing up global diesel and gasoline prices. In the U.S., diesel prices are approaching an all-time high of $6 per gallon, and the average gasoline price has also stayed at $4.22 per gallon. These persistently high end-consumer energy prices further underscore the reality of a globally tight energy supply situation.
3 Structural inventory destocking, official upward revision of oil price forecasts
This week, the API inventory data showed a structural divergence, generally aligning with a tight supply and demand situation. Coupled with the EIA raising its annual oil price forecast, the fundamentals further support the strengthening of oil prices at high levels.
As of the week ending September 4, API inventory data showed that U.S. crude oil stocks fell by 327,000 barrels, and gasoline stocks declined by 1.87 million barrels. The two core product categories continued to see inventory declines, underscoring the resilience of Chinese consumption and inventory destocking. Only distillate fuel oil stocks rose by 1.98 million barrels, indicating a relatively weaker trend. Compared with market expectations, the decline in crude oil inventories was less than anticipated, but gasoline inventories fell far more than expected. Overall, the inventory structure remains relatively bullish, providing fundamental support for rising oil prices. This time, the official EIA inventory report has been delayed until early Friday morning Beijing time due to the holiday, leaving the market eagerly awaiting further data to confirm the supply-and-demand dynamics.
Meanwhile, the EIA released its Short-Term Energy Outlook, significantly raising its oil price forecasts for the current and next two years—adjusting upward by nearly 5%. The report pointed out that the ongoing conflict in Iran has severely constrained oil exports and production in the Middle East. So far this year, global oil inventories have cumulatively declined by 400 million barrels, and this downward trend in inventories is expected to continue through the end of the year. The persistent depletion of inventories coupled with supply disruptions forms the core fundamental logic behind the upward shift in oil price levels this time around. Following these adjustments, the estimated average spot price of Brent crude oil for 2026 has been raised to $91 per barrel, while the average price of U.S. crude oil is now forecasted at $84.65 per barrel.
III. Outlook for the Future Market: In the short term, geopolitical factors will continue to drive prices higher and remain relatively strong; in the medium term, we should closely monitor the pace of hostilities for potential turning points.
Crude oil analysts believe that the current crude oil market has entered a strong pattern dominated by geopolitical risks and underpinned by fundamentals, with short-term oil prices fluctuating at high levels with a bias towards strength.
In the short term, as the conflict between the US and Iran continues, the traffic in the Strait of Hormuz remains low, and the physical market is strongly supported by rigid demand. Coupled with the continuous reduction of global inventories, oil prices are strongly supported at the $100 mark, and it is highly likely to continue a strong fluctuation, with the amplitude of fluctuations increasing due to ongoing geopolitical news.
In the medium to long term, the core turning point of the market is anchored to the direction of the conflict after the U.S. midterm elections. If the anticipated easing of U.S.-Iran tensions and the resumption of strait shipping occur after November, the accumulated high geopolitical premium will be quickly released, and there is room for a significant drop in oil prices; if the conflict continues to escalate and shipping is fully restricted, coupled with low global inventories, oil prices will have further upward potential.
Going forward, close attention will be paid to the EIA’s official inventory data, the latest military developments by both the U.S. and Iran, and changes in shipping traffic data through the Strait of Hormuz. These factors will directly influence the short-term volatility of oil prices.
