Multiple bearish factors strike suddenly! China reportedly suspends refined oil exports, US military reinforces troops in the Middle East, international oil prices surge over 4% in a single day.

The international crude oil market was once again ignited by supply-side and geopolitical news on Thursday. Oil prices closed sharply higher throughout the day, with Brent crude settling up more than $4, as the market worried that China's suspension of refined oil product exports and the US military buildup in the Middle East could further worsen already tight global fuel supplies. As of the close, the December Brent crude futures contract on ICE settled at $102.31 per barrel, up $4.28, or 4.37%; US West Texas Intermediate (WTI) crude futures settled at $92.87 per barrel, up $2.45, or 2.71%. According to reports, the United States is sending a third aircraft carrier and up to 10,000 additional troops to the Middle East, as US President Trump weighs resuming strikes on Iran after the midterm elections. Speaking to reporters before leaving the White House for a campaign event, Trump said he was weighing options on Iran. "Now I have to make a decision. They either sign a very fair agreement, or they will cease to exist." The remarks further intensified market concerns about escalating conflict. Meanwhile, four people familiar with the matter said Chinese refiners have suspended exports of oil products to regions outside Hong Kong and Macau until further notice. The news became the key catalyst for oil prices reversing their early decline. Prices had previously fallen 1% before rebounding strongly after the news of the refined fuel export suspension. UBS analyst Giovanni Staunovo said China's export ban indicates market concerns about domestic refined product supply; after recent declines in China's crude and fuel inventories, whether the measures will support higher crude imports remains to be seen. On the supply side, crude oil is still continuing to enter the market, but diesel and other refined products remain in short supply after damage to refinery infrastructure in the Gulf of Mexico and Russia. Global diesel inventories were already tight, and Russia, as a major exporter, has extended its export ban until October. Industry sources said the shortage is unlikely to end before next year. Russian President Putin previously said Russia would not supply diesel to the global energy market unless sanctions on Moscow are lifted. Capital Economics senior climate and commodities economist Hamad Hussain pointed out that the impact of China's fuel export restrictions will not be as large as the losses of refined product exports from Russia and the Middle East, but amid severely constrained supply, it is another source of pressure on the global fuel market. To ease the pressure, two EU diplomats said the EU energy working group will meet on Friday to discuss whether to release diesel inventories. Sources also said the Trump administration has asked Germany and France to use emergency diesel stockpiles or potentially face a US diesel export ban. US Treasury Secretary Scott Bessent also urged European partners to help ease the global shortage. On the geopolitical front, diplomatic efforts to end the Iran conflict have been relatively sluggish recently, and attacks continue. Shipping intelligence service Marisks said three Liberian-flagged tankers were hit by unidentified projectiles while passing through the Strait of Hormuz on Tuesday. The UK Maritime Trade Operations (UKMTO) also reported that a tanker was hit by an unidentified projectile in the Strait of Hormuz, with the extent of damage and environmental impact still unclear. Sources said Iran is preparing a broader and more forceful response if the United States resumes large-scale military attacks, while continuing to pursue diplomatic efforts, though Iranian officials privately believe the chances of diplomatic success are slim. Iran appeared not to load crude onto tankers in September, indicating that the US naval blockade is cutting off its access to energy markets. Oil prices have been highly volatile this week, with traders weighing improving Middle East supply against the risk of escalating conflict. Brent crude is still up nearly 70% this year, and the US-Iran conflict has entered its eighth month, with little progress toward a diplomatic solution. ANZ analysts Brian Martin and Daniel Hynes said in a report that the oil market is highly vulnerable to another price spike, with inventories at low levels after six months of declines, and investors increasingly worried that Iran will respond to the military buildup by attacking US assets and regional energy infrastructure. Wall Street analysts said earlier this week that Middle East supply flows have approached pre-war levels, but fuel supply has not recovered to the same extent. Despite rising risks, some signs of supply improvement are still emerging. Saudi Arabia resumed loading tankers from Yanbu on Tuesday after restarting the East-West pipeline. Meanwhile, Goldman Sachs estimated that Gulf oil exports, including "shadow exports" with transponders turned off, have recovered to 23.3 million barrels per day over the past week, in line with the 2025 average, as September exports doubled. Analysts also raised their forecast for average Brent crude prices in 2026 to $89.05 per barrel, but noted that Middle East exports are gradually improving.