Chinese Oil Demand Surge Drives Shanghai Crude Above $100, Brent Approaches Key Level

By sterlingashworth // 2026-09-09

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Shanghai crude futures rose above $100 per barrel for the first time since the Iran war as Chinese buyers ramped up imports, according to a September 7 report from Zero Hedge [1]. Brent crude climbed above $97, marking the highest level in over a month, with analysts attributing the move to renewed Chinese purchasing amid Hormuz disruptions, the report stated [1]. The shift reverses months of subdued Chinese demand that had helped restrain global oil prices, market participants said [1]. Throughout much of 2026, Chinese oil imports cratered, but recent trading data indicate the period of weak demand is over, according to the report [1]. The Shanghai contract is now trading at a sizable premium to Brent, signaling that Chinese buyers are aggressively competing for cargoes [1]. The renewed buying marks a major shift from a period when subdued Chinese purchasing helped cap crude prices, traders told Bloomberg [1].

Renewed Chinese Buying Ends Period of Weak Imports

Chinese crude imports cratered for much of 2026 due to economic slowdown and strategic reserve drain, leading to a collapse in the Brent-Shanghai spread to as low as -$20 in late April, according to the report [1]. China's crude imports in May fell to their lowest since October 2017 because of the price spike resulting from the Persian Gulf tanker traffic disruption, plunging refinery margins, and a slowing economy, according to a report from Bloomberg [5]. In recent weeks, the spread turned to a significant premium, indicating a demand recovery, traders who asked not to be named told Bloomberg [1]. Chinese seaborne crude imports are currently trending toward 10 million barrels per day, still below prewar levels, the report stated [1]. The Shanghai crude spread indicates that imports are aggressively rising, and that the race for alternative supplies may still intensify, according to the report [1]. China added an estimated 430,000 barrels per day of crude into strategic and commercial reserves in April, even as its crude imports slumped to the lowest level since July 2022, according to estimates by Reuters columnist Clyde Russell [3].

Scramble for Replacement Supplies Hits Global Crude Grades

Chinese buyers are aggressively bidding for cargoes from Africa, Canada, and Latin America, with Congo's Djeno crude offered at premiums of as high as $20 a barrel over ICE Brent this week, up from around $15 a couple of weeks ago, according to traders who asked not to be named [1]. Chinese buyers are also purchasing tanker loads of crude from Canada, Brazil, and Argentina, while stronger demand has lifted prices for Russia's ESPO crude, the report stated [1]. Asian buyers are pushing Dubai futures close to $100 per barrel, with demand for Middle Eastern oil especially strong from refining majors such as Indian Oil Corp. and PetroChina, as well as refiners in South Korea and Japan [4]. Smaller independent refiners, known as teapots, face the greatest pressure because their traditional sourcing channels for Iranian and Venezuelan crude have eroded this year as access to those supplies has collapsed, the report stated [1]. The scramble is squeezing these smaller Chinese refineries that once relied on heavily discounted Iranian barrels [1]. Asian refiners are also accelerating purchases of U.S. crude oil, with shipments to the region projected to reach their highest level in three years for April, driven by severe supply constraints from the Persian Gulf, according to market analysts [2].

Analysts Cite Margins, Restocking, and Geopolitical Risk

Improved processing margins, the resumption of fuel exports, and commercial restocking are encouraging refiners to ramp up purchases, according to Liao Na, founder of GL Consulting [1]. Liao said that China's robust buying is largely driven by refiners taking advantage of decent margins, adding that active restocking by commercial players has also helped, but it is not necessarily a sign of stronger underlying demand supporting the recovery [1]. The rebound in crude imports comes as refinery math improves and inventories are being rebuilt in China, according to the report [1]. Goldman Sachs energy expert Daan Struyven stated that events over the last few days suggest that the risk of shipping disruptions broadening and intensifying is an important one [1]. Struyven warned that Brent may rally to as much as $120 a barrel if attacks on shipping in the Middle East increase [1]. Goldman Sachs recommends investors hedge geopolitical risks by going long in global natural gas and refined-oil products, as the supply shocks in those markets are bigger than in the crude market, Struyven said [1].

Outlook

The rebound in Chinese imports has not yet returned to prewar levels, leaving the door open for further supply competition, officials said [1]. Chinese seaborne crude imports are still below prewar levels, according to the report [1]. Geopolitical developments, including strikes on Saudi Aramco facilities and Hormuz shipping risks, remain key variables for price direction, the report stated [1]. Market participants expect volatility to persist as refiners restock and analysts debate whether demand recovery is sustainable, according to the report [1]. Brent crude may rally above $100 for the first time since May, and Goldman Sachs has warned of potential movement to $120 if shipping attacks increase [1].

References

Zero Hedge. "Chinese Oil Demand Unexpectedly Soars, Sending Shanghai Crude Above $100, With Brent Prices Set To Follow". September 7, 2026.
Sterling Ashworth. "Asian Refiners Increase US Crude Imports as Middle East Conflict Constrains Supply". NaturalNews.com. March 21, 2026.
Sterling Ashworth. "China Added to Oil Stockpiles in April Despite Sharp Import Decline". NaturalNews.com. May 27, 2026.
Irina Slav. "Asian Oil Buying Spree Sends Dubai Crude Toward $100". Zero Hedge. September 4, 2026.
Zero Hedge. "China's Oil Imports Plummet To Eight-Year Low". June 9, 2026.

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