September 24th report:
The latest adjustment window for China's refined oil prices opened at 24:00 on September 24. The retail price of refined oil will be increased again in this round. In 2026, the retail price of refined oil in China will have experienced thirteen increases, five decreases, and one suspension. During this cycle, the crude oil market trend first rose and then fell, but the crude oil change rate remained positive, leading to a "three consecutive increases" in the retail price of refined oil.
Entering this pricing cycle, international oil prices first rose and then fell. As of the 23rd, the settlement price for the November contract of U.S. WTI crude oil futures was $92.16 per barrel, and the settlement price for the December contract of Brent crude oil futures was $95.41 per barrel. In the early part of the cycle, the geopolitical conflict in the Middle East escalated from "intermittent friction" to a "continuous cycle of retaliation," completely overturning the market's previous expectation of "low-intensity conflict and controllable supply." The market re-priced the risk of long-term energy supply disruption. The ongoing geopolitical conflict led to a continuous decline in the efficiency of shipping through the strait, tightening physical supply and providing solid bottom support for oil prices, causing oil prices to rise. Later, as the risk premium from the earlier Middle East geopolitical conflict quickly dissipated, the prices of both benchmark crude oils fell sharply, both reaching their lowest levels since September 9th, leading to an overall weakening of the energy sector. The core driver of this round of decline was the market's optimistic expectations for the easing of the Middle East situation and the recovery of oil supply, completely reversing the previous trading logic of supply panic. Overall, oil prices still showed an upward trend. To mitigate the impact of rising international oil prices on China, the government continued to implement regulatory measures on refined oil prices. According to the current pricing mechanism, starting from 24:00 on September 24th, the prices of gasoline and diesel (standard products) in China should be increased by 830 yuan and 800 CNY per ton, respectively. After regulation, the actual increases were 395 yuan and 385 CNY per ton, which translates to an increase of 0.31 yuan per liter for 92-octane gasoline, 0.33 yuan per liter for 95-octane gasoline, and 0.33 yuan per liter for 0-diesel.
Gasoline: Recently, the operation of Chinese refineries has not changed much, and the supply of refined oil products is normal. The operating rate of local refineries in Shandong has continued to decline to below 50%, while the operating rate of major refineries has remained largely unchanged. Additionally, the inventories of refined oil products at both major units and local refineries in China are generally maintained at low levels, making the supply-side pressure manageable and providing a foundation for price increases. At the same time, the resource situation at major units has not been effectively alleviated, and some regions have even experienced tight resource conditions. Recently, car travel has been relatively stable, providing some support for gasoline consumption. However, the continuous increase in the penetration rate of new energy vehicles (NEVs) has created structural pressure, significantly impacting the traditional gasoline market. High oil prices themselves also suppress the frequency of car usage by some owners. The strong rise in crude oil prices has provided robust support to the refined oil market, leading to high and volatile gasoline prices.
Diesel: Recently, the diesel market supply has been relatively normal. As the hot and rainy weather subsides, the operating rates of construction, infrastructure, and outdoor mining operations are gradually increasing. Additionally, with the arrival of the Golden September, logistics and transportation have increased, leading to a rise in the essential consumption of diesel. Although the summer harvest has ended and the demand for agricultural fuel has decreased, the end of the fishing ban in both southern and northern China has led to an increase in marine fuel usage, significantly boosting the demand for diesel. Coupled with strong cost support, diesel prices have remained high, resulting in a significant increase in the diesel market.
Looking ahead, the crude oil market has entered a robust phase dominated by geopolitical risks and underpinned by solid fundamentals, with prices likely to remain range‑bound at elevated levels in the short term. In the near term, traffic through the Strait of Hormuz remains subdued, while strong underlying demand in the physical market provides firm support. Coupled with ongoing global inventory drawdowns, oil prices have found strong backing around the $100 mark, suggesting a continued tendency toward bullish volatility, with price swings amplifying in response to geopolitical developments. High oil prices are exerting upward pressure on China’s gasoline and diesel prices; however, the combined effects of elevated energy costs, the rise of alternative fuels, and rainy weather could keep petroleum consumption sluggish. While crude oil continues to support refined‑product pricing, weakening demand will weigh on future price gains, leaving the outlook for gasoline and diesel prices tilted toward steady strength.
