Starting at midnight today (July 31), the domestic refined oil product price adjustment window will open, raising prices for consumers.
According to monitoring by the National Development and Reform Commission's Price Monitoring Center, during this adjustment cycle (from July 17 to July 31), international oil prices have generally risen more than fallen, showing staged volatility influenced by factors like repeated military conflicts between the United States and Iran. The average price in this cycle is significantly higher than the previous one.
Starting at midnight on July 31, retail price limits for gasoline and diesel will increase by 685 yuan and 655 yuan per ton, respectively. Nationally, on average, the price of 92-octane gasoline, 95-octane gasoline, and 0-octane diesel will rise by 0.54 yuan, 0.57 yuan, and 0.56 yuan per liter, respectively. For a typical vehicle refueling with a full 50-liter tank of 92-octane gasoline, the cost will increase by 27 yuan.
Reasons for Oil Price Rise
During this adjustment cycle, international oil prices have shown more increases than decreases due to several factors. First, the uncertain and unpredictable evolution of the US-Iran situation has exacerbated oil price volatility. At the start of the cycle, the US and Iran continued to engage in military strikes against each other, with tensions in the Middle East driving up oil prices. The Brent crude oil futures price (hereafter) briefly broke through $100 per barrel. From July 24 to 28, the two sides temporarily halted strikes, causing oil prices to rapidly fall to around $84 per barrel. From July 29 onward, US-Iran hostilities reignited, and oil prices fluctuated upward to near $89 per barrel.
Second, the blockage of key maritime crude oil transport channels has worsened supply shortages. In the Strait of Hormuz, Iran currently blocks the channel, while the US enforces a maritime blockade on Iran, blocking the main export route for Gulf state crude oil. In the Red Sea and Bab el-Mandeb Strait, starting July 20, Yemen's Houthi rebels announced a maritime embargo on Saudi Arabia, attacking multiple Saudi-linked tankers that violated the ban, resulting in a sharp reduction in vessel traffic through the Bab el-Mandeb Strait. In the Black Sea, Sea of Azov, and Caspian Sea, recent confrontations between Russia and Ukraine over maritime food and energy transport lines have led to attacks on each other's ports and ships, disrupting crude oil exports from the region.
Additionally, a sharp decline in US oil storage reserves and peak summer demand for petroleum have also contributed to international oil price movements.
The National Development and Reform Commission's Price Monitoring Center has assessed that current geopolitical tensions carry significant uncertainty. Recently, US-Iran hostilities have reignited and are escalating, with the US launching large-scale military strikes against Iran and conducting joint air raids with Saudi Arabia on pro-Iranian militia forces in Iraq. Iran has retaliated by striking US military bases in Jordan, Kuwait, and Bahrain. Going forward, it will be crucial to continuously focus on the impact of the US-Iran situation on international oil prices.
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