1. Market Review: Brent returns above $100/bbl after six weeks; domestic and overseas futures surge in tandem

September 9 (US Eastern Time) marked a landmark trading session for the crude oil market, as a cluster of geopolitical news triggered a sharp rally. Crude oil futures climbed higher throughout the session and closed firmly at elevated levels. The Asian session on September 10 saw continued strong consolidation.

ICE Brent crude front-month November contract settled at **$101.21 per barrel**, up $3.29, or 3.36%. The intraday peak hit $101.58/bbl, marking the first valid breakout above the psychological $100 threshold since the sell-off in July. The rally began from the July low of $65.83/bbl, with cumulative gains exceeding 50% to date, and the upward momentum accelerated sharply. The market has kept pricing in rising risk premiums tied to potential supply disruptions in the Middle East.

NYMEX WTI crude October contract closed at **$96.05 per barrel**, rising $3.02, or 3.25%, hitting its highest level since early June. The Brent-WTI spread remained near $5/bbl, as Brent, the benchmark for Middle East crude, drew stronger premium amid fears over disrupted crude shipments from the Persian Gulf.

China’s INE crude futures SC2610 main contract tracked the overseas rally and closed at 773.1 yuan per barrel, up 50.6 yuan, a gain of nearly 7%. The spread between domestic and international crude widened rapidly, lifting landed costs of imported crude and transmitting upward pressure to the refining sector and domestic retail fuel price expectations. Notably, volatility in crude options markets spiked, with rising long call positions as funds hedged against further upside risks from worsening Middle East tensions, reflecting heightened market caution.

Year-to-date, Brent crude has climbed roughly 65%. The dominant market narrative has fully shifted from previous recession fears to geopolitical supply risks in the Middle East. The short-term price pattern has changed dramatically; news events now outweigh traditional supply-demand fundamentals, bringing more frequent intraday gaps and volatile whipsaws, and greatly increasing trading uncertainty.

2. Core Catalyst: Escalating US-Iran Confrontation in the Persian Gulf; Two key energy shipping lanes under pressure

The primary driver pushing Brent above $100/bbl is the escalating US-Iran standoff in the Persian Gulf, compounded by renewed shipping risks in the Bab el-Mandeb Strait in the Red Sea. The world’s two most critical crude transportation corridors are simultaneously threatened, prompting markets to reprice persistent supply outage risks.

On September 8 local time, US Central Command issued a statement that US forces destroyed five Iranian crude tankers in the Persian Gulf, in response to earlier ballistic missile attacks by Iran’s Islamic Revolutionary Guard Corps (IRGC) against US warships. In retaliation, the IRGC released an official statement on September 9, announcing strikes targeting two US warships, eight commercial oil tankers and ten vessels deemed to be navigating illegally within the Strait of Hormuz. Ballistic missiles were also launched at US military bases in Jordan, extending the conflict beyond localized skirmishes in Persian Gulf waters.

Meanwhile, the Houthi movement in Yemen launched coordinated operations. On September 8, ballistic missiles and drones targeted multiple cities in southern Saudi Arabia including Abha, Jizan and Najran, focusing on Saudi Aramco energy infrastructure. Some refining units caught fire and were temporarily shut down, leaving 73 civilians injured. The Houthis issued a warning of continued attacks on Saudi energy assets and threatened to block the Bab el-Mandeb Strait, a vital export route for Saudi crude shipped from its western coast. Any closure would severely disrupt Saudi oil exports.

The Strait of Hormuz handles approximately 30% of global crude oil shipments and serves as a critical global energy artery. Vessel tracking data from Kpler shows that tanker traffic through the strait has fallen sharply, currently standing at only 20% of pre-conflict levels. Many shipowners have voluntarily rerouted vessels for safety reasons, marine insurance premiums have surged, tanker turnaround efficiency has deteriorated, and delivery lead times for physical crude cargoes have lengthened. Extra freight costs from longer diversion routes have further boosted physical crude spot premiums, meaning tightness in the cash market is more pronounced than futures prices reflect.

In an interview on September 9, Donald Trump stated that the current US-Iran conflict is expected to end after the US midterm elections in November, though oil prices would lag behind any ceasefire. He added that crude would fall sharply once hostilities stop. Market interpretations are split: some traders believe the conflict has a defined timeline and long-term risks remain contained, while other institutions warn that localized friction can easily escalate, making it difficult for geopolitical risk premiums to fade quickly in the near term. US domestic gasoline prices have also climbed. AAA data shows the national average retail gasoline price has risen to $4.22 per gallon, the highest since June, reigniting domestic inflation pressures in the United States.

3. EIA releases Short-Term Energy Outlook on September 9, sharply raising oil price forecasts

The monthly EIA report stands as the most important fundamental release this week. Based on the assessment that Middle East supply disruptions will last longer than previously projected, the agency upgraded its oil price baseline for this year and next, alongside updated forecasts for global inventories and offline production capacity.

On price projections: EIA lifted its 2026 average Brent spot price forecast to **$91 per barrel**, an upward revision of nearly 5%. The 2027 Brent average forecast was raised to $74/bbl. Average Brent spot prices in H2 2026 are projected to stay around $90/bbl, an $8 upward adjustment from the August outlook. The full-year 2026 average WTI spot price forecast was increased to $84.65/bbl. EIA forecasts that crude prices will only see a trend decline in 2027 as Middle East oil exports gradually resume and global stockpiles rebuild.

Inventory and supply disruption data: The report estimates global crude inventories have fallen by roughly 400 million barrels in 2026, with stock drawdowns set to continue through year-end. Average offline crude production capacity in the Middle East reached 6.7 million barrels per day (bpd) in August, up from 5 million bpd in July. EIA projects Middle East outages will remain at 5.7 million bpd on average in Q4 2026. The EIA also outlined scenario risks: further obstruction of shipping through the Strait of Hormuz would widen supply gaps and open the door for additional oil price gains. While alternative solutions such as overland pipeline transfers and ship-to-ship cargo transfers will slowly restore Middle East export capacity, full recovery to pre-conflict shipment volumes is not expected until Q2 2027.

The report also addresses supply offsets from non-OPEC producers: rising output from the US, Canada and Guyana partially offsets Middle East supply losses, though incremental volumes are limited and cannot fully plug the shortfall from disrupted Persian Gulf exports, a core reason for the upward price revision.

4. OPEC+ latest policy: Halt production increases for October, switching to a wait-and-see stance

On September 6 local time, seven core OPEC+ members including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman held an online ministerial meeting. The group agreed to keep October production quotas unchanged from September, pausing the monthly production hike cycle launched in April. This marks the first suspension of planned output increases in the current cycle.

In its official statement, OPEC said the decision aims to safeguard stability in the global oil market. The seven nations will continue to assess supply-demand balances and geopolitical developments on a monthly basis. The next formal OPEC+ meeting is scheduled for October 4 to re-evaluate production policy. Market analysts widely view the pause as a passive response to Middle East turmoil rather than a proactive tightening move. Despite higher quotas set earlier, actual export volumes from some producers are far below allocated limits due to Persian Gulf shipping disruptions, leaving the higher quotas largely unworkable.

Actual production figures show OPEC’s total crude output fell by 900,000 bpd month-on-month in August to 19.91 million bpd. The decline stemmed from export disruptions in the Middle East rather than voluntary cuts by member states. The existing voluntary production reduction plan of around 2 million bpd remains in force through the end of 2026. Market focus now centers on whether OPEC+ will resume output increases to cool prices if crude surges further, or reintroduce deeper cuts to underpin prices if geopolitical tensions ease and oil slumps. Divisions persist within the alliance: Iraq and other members are pushing for higher long-term production baselines, which may become a key point of contention at the October meeting.

5. Global oil demand, macro USD environment and research views from major investment banks

5.1 Global crude oil demand

The Northern Hemisphere summer gasoline consumption peak is gradually fading. US refiners are entering seasonal maintenance, leading to a marginal pullback in product demand and weaker gasoline crack spreads, which weigh on downstream crude consumption. However, refining run rates in Asia remain stable, and China’s crude procurement stays steady, with physical buying support offsetting weaker demand in Europe and the US during the off-season. Overall, global crude demand has not collapsed in a recessionary fashion. Demand-side factors are not acting as a bearish driver, and the market remains underpinned by a tight supply-demand balance.

Longer term, concerns linger that slowing global economic activity will weigh on oil consumption in Q4, though demand headwinds have been overshadowed by geopolitical risks for now.

5.2 Federal Reserve policy and US dollar outlook

US dollar strength and Fed rate expectations are key bearish variables for commodities, but geopolitical risk premiums currently dominate price action, pushing macroeconomic factors into a secondary role. Market consensus expects the Federal Reserve to hold rates steady at its September policy meeting. The debate hinges on the tone of Fed communications. Hawkish remarks signaling delayed rate cuts would strengthen the US dollar and pressure crude and other commodities. Conversely, dovish commentary, pricing in earlier rate reductions, would weaken the dollar and support oil prices. Still, a further escalation of Middle East hostilities would override macro signals, with crude moving primarily on geopolitical headlines.

5.3 Views from major investment banks

Goldman Sachs commodities team updated its scenario forecasts: if US-Iran tensions persist and Strait of Hormuz crude exports remain constrained, Brent could rise as high as $120 per barrel. By contrast, a rapid ceasefire would erase geopolitical risk premiums and trigger a sharp correction. Goldman also warns that a large share of current crude prices represents sentiment-driven premium; prices can fall rapidly once news flow reverses.

Analysts at ING and PVM Oil Associates share a similar view: the crude market is already pricing in persistent Middle East supply disruptions, and trading capital remains highly sensitive to breaking news. Domestic futures institutions warn that crude volatility will remain elevated, with high risk of overnight price gaps. While fundamental tightness forms a floor for prices, near-term moves are heavily dictated by real-time developments from the Persian Gulf. Traders are advised to enforce strict risk controls.

6. Domestic retail fuel price adjustments and impacts on refining

China’s retail oil price adjustment window opens at 24:00 on September 11. Based on prevailing international crude prices, the crude price change rate has reached 5.07%. Estimates point to a hike of roughly 260 yuan per tonne for gasoline and diesel, equivalent to a rise of 0.20–0.24 yuan per liter. The final adjustment will be officially released by the National Development and Reform Commission. If implemented, domestic fuel prices will see another notable increase this year.

For domestic refiners, rising global crude has lifted raw material procurement costs and landed import prices. There is a lag before retail fuel prices catch up, squeezing refining margins in the short run. The sharp rally in INE crude futures has also amplified volatility across China’s petroleum industry chain.

7. Key monitoring items for future market trends

1. Further attacks on tankers in the Persian Gulf and Strait of Hormuz; whether US and Iran expand targets to major oil production facilities in Saudi Arabia and the UAE — the most important near-term variable.
2. Weekly EIA data on US crude, gasoline and distillate inventories, plus progress of US refinery maintenance.
3. The OPEC+ meeting on October 4, including production policy decisions and negotiations over member quotas.
4. The Federal Reserve’s September policy decision and official communications, alongside US dollar and Treasury yield movements.
5. Diplomatic developments between the US and Iran, and any talks aimed at de-escalation.
6. Shipping conditions in the Red Sea and Bab el-Mandeb Strait, and continued Houthi attacks on Saudi energy infrastructure.
7. Global crude spot premiums and tanker freight rates to gauge real tightness in the physical oil market.

Disclaimer: This content is compiled for market information purposes only and does not constitute investment advice. Crude oil is highly sensitive to sudden geopolitical news and subject to extreme price volatility. Futures and options trading carry substantial risks. Please make trading decisions with caution.