Oil's roundtrip back to $100. Why China could determine what happens next — SkimNews
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- U.S. crude oil topped $102/barrel Thursday for its highest close since May, up about 50% from its summer low of $68.55 reached roughly three weeks after the now-failed June 17 Washington–Tehran MOU.
- Saudi Arabia's East-West oil pipeline was shut down after multiple attacks as Middle East fighting escalated this week.
- China held prices in check by slashing crude imports 3–5 million bpd during the war — what Rapidan Energy's Bob McNally called "China's crash diet" — drawing on a petroleum reserve exceeding 1 billion barrels.
- Chinese refiners are now re-entering the market because diesel profit margins have soared after the Iran and Ukraine wars knocked out significant global refining capacity, per CIBC Private Wealth's Rebecca Babin.
- China's imports collapsed to a wartime low near 6 million bpd in June — down nearly 50% from 11.5 million bpd in February — before rebounding to about 7 million bpd in July and August, according to Kpler data.
- Global oil inventories have plunged 400 million barrels over six-plus months of war, and emergency stockpile releases are nearing an end, eroding the buffers that previously capped prices.
- McNally said the Trump administration's verbal intervention is losing traction: "jawboning about peace being around the corner seems to be ebbing," with U.S. crude still trading below its April 7 wartime closing high of $112.95.
Why it matters: The same demand pull that was previously offset by China's restraint and its 1-billion-barrel reserve now meets a market that has already shed 400 million barrels of inventory with emergency releases ending. With China's refiners buying again because diesel margins are too rich to pass up and Trump-administration jawboning losing effectiveness, the path toward the April $112.95 high has fewer cushions than the rally that got prices to $102.
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