Oil prices jumped more than 4% on Thursday as concerns over tightening fuel supplies intensified following reports that China had suspended oil-product exports and the United States was preparing to send additional military forces to the Middle East.
Brent crude settled at $102.31 a barrel, up $4.28, or 4.37%. U.S. West Texas Intermediate crude gained $2.45, or 2.71%, to finish at $92.87.
The rally came after a volatile session in which prices initially fell before reversing higher following reports that Chinese refiners had halted exports of oil products beyond Hong Kong and Macau until further notice.
UBS analyst Giovanni Staunovo said the restrictions suggested Beijing was concerned about domestic fuel availability. He added that it remained unclear whether the move would lead to increased crude imports after China recently reduced its crude and fuel inventories.
Fuel Supply Concerns Grow
Global fuel markets are already facing tight supplies, particularly for diesel and other refined products. Refinery infrastructure in the Gulf and Russia has suffered damage, while Russia has extended a ban on diesel exports through October.
Russian President Vladimir Putin has also said Moscow will not resume diesel supplies to global markets until sanctions against Russia are lifted.
Hamad Hussain, senior climate and commodities economist at Capital Economics, said China’s restrictions would have a smaller impact than the loss of refined-product supplies from Russia and the Middle East, but added another source of pressure to already constrained fuel markets.
The European Union’s energy task force was due to meet Friday to discuss potentially releasing diesel reserves. Sources also said the Trump administration had urged Germany and France to release emergency diesel stocks or potentially face restrictions on U.S. diesel exports.
Middle East Tensions Support Oil Prices
Oil prices also rose as geopolitical tensions increased. The Wall Street Journal reported that the United States was preparing to send a third aircraft carrier and as many as 10,000 additional troops to the Middle East as President Donald Trump considered whether to resume strikes on Iran.
Trump said he was weighing his options and that Iran would either agree to a deal or face further consequences.
Diplomatic efforts to end the conflict have remained limited as attacks continue. Three Liberian-flagged oil tankers were struck by unidentified projectiles while traveling through the Strait of Hormuz on Tuesday, according to shipping intelligence service Marisks.
Iran is preparing for a potentially stronger response if the United States resumes large-scale attacks, sources told Reuters, while continuing diplomatic efforts.
Analysts Raise Oil Price Forecasts
Prolonged disruptions have prompted analysts to raise their average 2026 Brent crude forecast to $89.05 a barrel, although there are signs that some Middle Eastern exports are recovering.
Saudi Arabia resumed tanker loadings at Yanbu after restarting its East-West Pipeline. Goldman Sachs estimated that Gulf oil exports, including shipments from vessels operating with location transponders switched off, had recovered to 23.3 million barrels per day over the previous week.
The increase in exports suggests some supply disruptions are easing, but tight refined-product inventories and continued geopolitical risks remain major factors for oil markets.
