Brent crude climbed above $102 a barrel on Thursday, reaching its highest level since late May as escalating attacks between the United States and Iran intensified concerns that disruptions to Middle Eastern oil supplies could persist.
Brent futures rose as high as $102.15 a barrel, extending a rally that has accelerated as attacks on tankers and restrictions around key Gulf shipping routes reduce the availability of crude from the region. U.S. West Texas Intermediate crude also advanced, reaching about $97.50 a barrel.
The Strait of Hormuz, which handled roughly a fifth of global oil and gas supplies before the conflict, remains heavily constrained, while renewed attacks on vessels have reduced expectations for a near-term normalization of shipping through the Gulf.
China Returns to the Oil Market
China’s crude purchasing is becoming increasingly important to the global supply balance after the world’s largest crude importer sharply reduced purchases earlier in the conflict.
Official customs data showed China imported 37.93 million metric tons of crude in August, equivalent to about 8.93 million barrels per day, an increase of 6.2% from July. August marked the second consecutive monthly increase, although imports remained 23.4% below a year earlier.
China had previously relied more heavily on inventories and reduced imports as Middle Eastern supply disruptions pushed prices higher. The U.S. Energy Information Administration said Chinese crude imports averaged just 8.1 million barrels per day during the second quarter, down 32% from the previous quarter. That reduction in demand helped moderate some of the upward pressure on global oil prices caused by disrupted flows through the Strait of Hormuz.
The latest increase suggests Chinese refiners are gradually returning to the international market. Onshore inventories fell by an estimated 550,000 barrels per day in August, according to Kpler data cited in industry reporting.
Still, China’s overall crude demand remains substantially below pre-conflict levels. Reuters reported that seaborne arrivals were about 7.14 million barrels per day in August, compared with an average of 11.41 million barrels per day in the three months before the conflict. The difference between that figure and customs data reflects the narrower scope of seaborne-only estimates.
U.S. Strategic Oil Reserve Falls to 1982 Low
Supply concerns are also being amplified by historically low levels of emergency crude inventories in the United States.
Crude held in the U.S. Strategic Petroleum Reserve fell by 1.2 million barrels to 285.4 million barrels last week, according to Department of Energy data. That was the lowest level since November 1982.
The decline is part of an agreement to release a total of 172 million barrels from the reserve, reducing the size of the emergency stockpile as global supply disruptions continue.
Middle East Disruptions Tighten Global Supply
The latest oil rally follows another escalation in attacks involving vessels and energy infrastructure in the Gulf. U.S. forces have targeted Iranian tankers, while Iran has continued to threaten shipping in the region. Separately, attacks involving Saudi energy infrastructure have added another source of supply risk.
The disruptions are increasingly visible beyond crude benchmarks. Tight supplies have pushed up refined-fuel prices and transportation costs, raising broader concerns about the inflationary consequences of an extended interruption to Middle Eastern energy flows.
