Oil Jumps 4% as China Halts Fuel Exports and US Troops Head to the Middle East

  • Oil prices surged on Thursday, October 1, 2026, after China suspended exports of oil products and reports emerged that the US was preparing to deploy additional military assets to the Middle East. Brent crude settled at US$102.31 per barrel, up 4.37% or US$4.28, while WTI rose 2.71% to US$92.87 per barrel.
  • Prices were volatile during the session, falling about 1% in early trading as recovering Gulf crude exports and higher US inventories eased supply concerns. However, the market reversed course following reports that Chinese refiners had suspended oil-product exports beyond Hong Kong and Macau until further notice.
  • The move by China added pressure to already tight global fuel markets. Diesel and other refined products remain in short supply following damage to refinery infrastructure in the Gulf and Russia, while Russia has also banned diesel exports through October. China’s restrictions are therefore expected to further constrain global fuel availability.
  • Oil prices were also supported by renewed geopolitical concerns after reports that the US was preparing to send a third aircraft carrier and up to 10,000 additional troops to the Middle East. U.S. President Donald Trump said he was still weighing his options regarding Iran, while diplomatic efforts to end the conflict remained subdued.
  • At the same time, crude exports from the Gulf have continued to recover. Goldman Sachs estimated that Gulf oil exports reached 23.3Mn barrels per day over the past week, broadly in line with the 2025 average. Saudi Arabia also resumed tanker loadings from Yanbu after restarting its East-West Pipeline.
  • Lingering disruptions to oil and refined-product markets have led analysts to raise their average 2026 Brent crude forecast to US$89.05 per barrel, although improving Middle East exports are providing some offset to supply concerns.
  • While Gulf crude exports are gradually returning towards normal levels, refined-product markets remain considerably tighter. China’s suspension of fuel exports adds another source of pressure to already constrained diesel and fuel supplies, which could keep energy prices elevated even as crude availability improves.

(Source: Reuters)