Brent crude oil prices have surged above $100 per barrel for the first time since July, driven by persistent geopolitical risks in the Persian Gulf and limited prospects for de-escalation between the US and Iran, according to ING analysts Warren Patterson and Ewa Manthey [1]. The rally has been fueled by concerns over potential disruptions to oil flows through the Strait of Hormuz, a critical chokepoint for global energy supply. ING notes that Iran has signaled readiness to intensify the conflict, while President Trump stated that the war is likely to continue until just after the midterm elections in early November, raising the risk of meaningful supply disruptions [1].
China's role has been pivotal in shaping the oil market's response to the crisis. According to S&P Global Ratings' Paul Gruenwald, China's years of stockpiling crude oil and its subsequent pullback on imports after the Middle East war erupted in late February helped the world avoid a 'doomsday scenario' when the Strait of Hormuz closure choked off 20% of global energy supply [2]. The U.S. Energy Information Administration (EIA) reports that China holds 1.4 billion barrels of strategic crude oil inventories, compared to 825 million barrels in the U.S. as of December 2025 [2]. China's crude imports dropped below 8 million barrels a day in May and June, marking the first decline since 2016 [2].
Despite initial forecasts by oil analysts that prices could surge to $150–$200 a barrel due to the abrupt supply disruption, Brent prices eased to around $80 a barrel before rebounding above $100 amid renewed hostilities between Iran and the U.S. in the Gulf [2]. Gruenwald commented that the current price level is still 'digestible' for the global economy [2]. However, the buffer provided by China's stockpiles may be waning, as official trade data shows China's crude imports rebounded by 22% and 6.2% month-on-month in July and August, respectively, though they remain significantly below last year's levels [2]. ING analysts also highlight that recent physical-market activity, particularly in the North Sea, suggests China's buying could continue to recover, which will be crucial for the sustainability of the current oil rally [1].
On the inventory front, overnight API data shows US crude oil inventories fell by 300,000 barrels over the last week, with gasoline stocks down by 1.9 million barrels and distillate inventories up by 2 million barrels. The more widely followed EIA inventory report is expected later today [1].
Looking ahead, Krishna Srinivasan of the International Monetary Fund warns that if China resumes importing at its pre-war pace, the drag on global growth from elevated oil prices could deepen well beyond current estimates [2]. ING analysts echo that Chinese buying behavior will largely determine whether the current rally has follow-through or fades [1].
CONCLUSION
Brent's surge above $100 per barrel is underpinned by escalating geopolitical tensions and the evolving dynamics of China's crude oil strategy. While China's stockpiles have so far cushioned the global market, a sustained rebound in its imports could intensify upward pressure on prices. The market remains highly sensitive to both geopolitical developments and China's future buying patterns.