China Returns to Crude Market as ICE Brent Extends Past $106
Beijing's pivot back to active crude buying removes the demand-side buffer that kept prices below $100 for most of the US-Iran conflict.
ICE Brent crude front-month settled at $106.45 a barrel on Thursday (2026-09-24), extending a rally of nearly 30% above its early-August lows as China expands crude buying after months of restraint that had helped contain prices during the US-Iran conflict.6,7
For most of the war, that restraint was a key moderating force. Brent averaged just $101 a barrel between the start of fighting on February 28 (2026-02-28) and June 11 (2026-06-11), well below the $200 forecasts that circulated once the Strait of Hormuz came under sustained pressure. The conflict's opening weeks saw dire predictions. They did not materialise.5,2
China explains much of the gap. The world's largest crude importer sharply cut purchases after the conflict began — withdrawing demand support at exactly the moment when supply-route anxiety was peaking. Nearly half of China's imported crude travels through the Strait of Hormuz, making Beijing acutely exposed to any escalation, and apparently wary enough to pull back on procurement volumes rather than absorb the risk.5,4
The United States added supply-side offset. Production reached a record 13.93 million barrels per day by April 2026, and the International Energy Agency coordinated a 400 million-barrel strategic reserve release in March (2026-03), among the largest such interventions on record, cushioning the market from the worst of the supply shock.5
Even so, prices moved sharply in both directions. On Tuesday (2026-05-19), ICE Brent plunged 17% to fall below $80 a barrel before rebounding to near $90 as traders parsed contradictory signals from Washington and Tehran. Prices surged 5% on Monday (2026-06-08), then shed more than 3% the next session (2026-06-09). NYMEX WTI front-month dropped 3.1% to $88.49 that day. Physical traders said prompt crude cargoes remained ample throughout those swings, which kept individual escalation spikes from compounding into a sustained breakout.1,3,5
The picture shifted in August. A deal between the United States and Iran to halt tanker attacks was never reached, and fighting resumed late in the month. ICE Brent crossed $100 on September 9 (2026-09-09) and traded at $101.61 by 08:14 GMT on September 10 (2026-09-10), as markets assessed the potential for further vessel attacks following what NV.UA described as the largest strikes on shipping in the conflict.7,6
That September move above $100 carries different weight than the earlier spikes. ING analysts said China has increased crude purchases in recent weeks after several months of reduced demand. If sustained, that shift removes the demand-side cushion that prevented prices from overshooting during the conflict's most intense phase, when ICE Brent peaked around $126, still below the 2008 all-time high of $147.6,5
Indian Express reporting puts gains at over 25% since early August, driven by resumed fighting and China's buying pivot arriving simultaneously. ICE Brent at $106.45 represents a sustained cost burden for import-dependent economies. India, which relies on crude imports to meet the bulk of its petroleum needs, faces direct exposure if prices hold at current levels.8
Physical supply has not tightened in step with prices. Traders said prompt crude cargoes remained ample, and the buffer built through the IEA reserve release has not been fully drawn down. The spread between the $126 peak and the current $106.45 suggests the market has so far treated this phase of the conflict as containable.5,3
The ceasefire talks that briefly stabilized sentiment collapsed without a framework for ending tanker attacks. China's pace of crude buying through October, and how long the physical supply surplus persists into higher winter demand, are what traders are now focused on. If China keeps rebuilding inventories while Hormuz disruptions persist, prices have room to push higher before US production and reserve buffers can fully compensate.4,6,5