A new adjustment for domestic refined oil product prices is scheduled for 24:00 on July 17. The 10-working-day statistical period for this price review has now completed four days. Influenced by another significant rise in international oil prices today, the current crude oil change rate has reached -2.26%, forecasting a price reduction of 85 yuan per ton. Based on this expected decline, gasoline and diesel prices are projected to fall by another 0.06 to 0.08 yuan per liter.
Due to renewed escalation of conflict in the Middle East, international crude oil futures prices surged significantly on the 8th, closing with gains exceeding 4%. At the close, the price for August delivery of West Texas Intermediate (WTI) crude on the New York Mercantile Exchange rose by $3.08 to settle at $73.52 per barrel, a gain of 4.37%. The price for September delivery of Brent crude on the London ICE Futures Europe exchange increased by $3.86 to settle at $78.02 per barrel, a gain of 5.2%.
On the 8th, while attending the NATO summit in Ankara, Turkey, U.S. President Donald Trump stated that he believed the understanding memorandum reached between the United States and Iran had "ended." He also indicated that the U.S. might strike Iran's civilian infrastructure and attempt to control Kharg Island. The Iranian Foreign Ministry issued a statement the same day condemning "the U.S. military's act of military aggression against several monitoring centers along Iran's southern coast," considering the successive U.S. attacks on Iran a serious violation of the Iran-U.S. understanding memorandum.
However, Trump later that day suggested that the escalating situation between the U.S. and Iran would subside quickly and that he did not believe another war with Iran would break out. This statement prompted a notable retreat in oil prices.
Capital Economics analyst Hamad Hussain noted that the direct impact of the U.S. reimposing sanctions on Iranian oil would likely be limited. The greater risk lies in Iran further restricting shipping through the Strait of Hormuz or the U.S. re-blockading Iranian ports. He believes the latest developments in Middle East conflicts pose a risk of delaying the recovery of oil production in the Gulf region, and crude oil prices are expected to remain volatile in the coming months.
Rystad Energy's Head of Geopolitical Analysis, George Leon, opined that the latest military conflict between the U.S. and Iran increases the risk of stalled negotiations or a continuation in a more fragile environment. Uncertainties surrounding vessel safety, insurance costs, potential delays, and further retaliation could lead to sustained volatility in oil prices in the near term.
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