Brent Crude Tops $100 as China Halts Fuel Exports

Brent crude oil prices rose nearly 4% to $101.50 on Thursday, surpassing the $100 per barrel threshold. The price spike follows a decision by the Government of China to suspend most refined fuel exports for October to prioritize domestic energy security during a week-long national holiday.

Under the current restrictions, refiners are authorized to ship oil products only to Hong Kong and Macau. The move comes as domestic inventories fall; Kpler estimates commercial diesel and gasoil stocks are 20 million barrels below pre-war levels, while gasoline stocks remain 9 million barrels short of Beijing's target threshold. In response, PetroChina cancelled several planned shipments of gasoline and jet fuel, and Zhejiang Petrochemical Corp scheduled no exports during the holiday period.

This supply squeeze tightens a global market already strained by Ukrainian attacks on Russian refineries and disruptions in the Middle East. While Persian Gulf exports have largely recovered from the Iran war, the Chinese suspension has put upward pressure on global diesel and jet fuel costs, contributing to record high diesel prices in the United States. Chinese authorities may reconsider these restrictions after October 7, depending on refinery output and inventory levels.