Oil Rises as Risks of Prolonged Mideast Conflict Fan Supply Worries

A man rides a bicycle in front of abandoned oil wells in Maracaibo lake, Zulia state, Venezuela on September 7, 2026. (Photo by John Chacَn / AFP)
A man rides a bicycle in front of abandoned oil wells in Maracaibo lake, Zulia state, Venezuela on September 7, 2026. (Photo by John Chacَn / AFP)
TT

Oil Rises as Risks of Prolonged Mideast Conflict Fan Supply Worries

A man rides a bicycle in front of abandoned oil wells in Maracaibo lake, Zulia state, Venezuela on September 7, 2026. (Photo by John Chacَn / AFP)
A man rides a bicycle in front of abandoned oil wells in Maracaibo lake, Zulia state, Venezuela on September 7, 2026. (Photo by John Chacَn / AFP)

Oil prices extended gains to multi-week highs on Tuesday as risks of a prolonged conflict in the Middle East grew after Iran threatened to retaliate against any new US attacks on its assets, heightening worries over supply disruption.

Brent crude futures were up $1.25, or 1.3%, to $98.25 a barrel by 0630 GMT. US West Texas Intermediate crude was at $93.70 a barrel, up $2.22, or 2.4%, Reuters reported.

Brent earlier rose to as much as $98.79 a barrel, its highest since July 24, while WTI reached $94.21 a barrel, its highest since June 8.

Following ⁠Monday's Labor Day ⁠holiday in the US, WTI was playing catch-up to Brent, which absorbed the weekend's escalation a day earlier, said Suvro Sarkar, head of energy research at DBS Bank.

"Overall, we believe the recent uptick in hostilities between the US and Iran has the potential to materially change markets' reading of oil price related risks not only for the rest of 2026, but well into 2027 now," he said.

Iran threatened the ⁠US with "economic warfare" and said it fired an advanced missile at US warships.

On Saturday, US forces had struck three Iranian oil tankers, including one near Kharg Island, Iran's main oil export hub, according to US Central Command. The attacks followed strikes by Iran's Revolutionary Guards on US warships operating in the region.

Shipping traffic through the Strait of Hormuz also slowed at the start of this week, after Iran threatened on Monday to retaliate for any new US attacks.

Meanwhile, Goldman Sachs raised its Brent and WTI price forecasts by $5 to $85 and $80, respectively, for December 2026 and to $80 and $75, respectively, for 2027, reflecting its new assumption that Middle East shipping disruptions continue into 2027.



China’s Exports Pick Up in August, Jumping 25% as Its Trade Surplus Widens

People shop in a bakery in a shopping mall in Beijing, China, 08 September 2026. (EPA)
People shop in a bakery in a shopping mall in Beijing, China, 08 September 2026. (EPA)
TT

China’s Exports Pick Up in August, Jumping 25% as Its Trade Surplus Widens

People shop in a bakery in a shopping mall in Beijing, China, 08 September 2026. (EPA)
People shop in a bakery in a shopping mall in Beijing, China, 08 September 2026. (EPA)

China’s exports jumped 25% in August from a year earlier on strong demand for autos and high-tech goods as its record trade surplus widened further, its customs agency said Tuesday.

The data was broadly in line with what economists had expected and comes just ahead of a planned meeting between Chinese leader Xi Jinping and US President Donald Trump. That's set for late September, though Beijing has not yet confirmed the exact date for the visit.

Trade is expected to be among the key topics of discussion between Trump and Xi when the two leaders meet.

China’s global imports climbed 28.2% in August from a year earlier, up from July’s 27.5% rise. Exports grew 23.9% year-on-year in July. The trade surplus expanded in August to $119.1 billion from $112.5 billion in July.

Policymakers in the US and elsewhere have raised concerns over China’s ballooning trade surplus, which surged to a record $1.2 trillion for the whole of last year. Beijing has said that it is not seeking to maximize its trade surplus.

In August, China's exports to the US totaled $42.5 billion, up 34.4% year-on-year, in part due to a base effect after higher US tariffs caused exports to fall last year. US exports to China last month were $13.3 billion, leaving a trade surplus in China's favor of about $29.2 billion, according to Chinese data.

Exports to the EU rose 6.6%, while those to Southeast Asia and Latin America rose 30.2% and 17.5%, respectively.

Exports have consistently outpaced imports and are “set to lead to a new record-high trade surplus this year,” said Lynn Song, chief economist for Greater China at the Dutch bank ING.

China has weathered disruptions from the Iran war better than many other countries. It also has been exporting more to Southeast Asia, Latin America and Africa, shielding it from the impact of higher US tariffs.

Exports of autos in August grew 43% year-on-year while semiconductor exports surged 129.8%, the customs data show.

“China is very competitive in its tech goods exports,” said Chi Lo, a senior market strategist for Asia Pacific at BNP Paribas Asset Management. In recent months, rising exports of electric vehicles, industrial machinery and semiconductors have helped fuel China’s robust shipments globally.

“China has moved aggressively up the value chain and has become a major player in AI infrastructure and industrial automation,” he said.

At home, China is still struggling to boost its economy as consumption and investment remained sluggish following a yearslong real estate sector downturn. On Sunday, China said it was injecting around $54 billion into state banks and insurers to help lift its economy.

China's continued reliance on exports to fuel growth prompted 19 members of the Group of 20 large economies to agree to address such economic imbalances at a recent meeting of top financial officials in Asheville, North Carolina. China was the lone dissenting G20 member after US Treasury Secretary Scott Bessent described China’s trade surplus as a barrier to global economic growth.

The strategic stalemate between China and the US will likely remain, said Lo of BNP Paribas. “Both sides hold each other hostage in some strategic products, with the US withholding high-end tech goods from being sold to China and China withholding rare-earth exports to the US,” he said.

China and the EU are also set to meet for ministerial level trade talks in the fall, as the EU struggles to reduce its roughly 1 billion euros-a-day trade deficit with China.

The EU implemented measures in July to protect its steel industry and has limited tax-exempt imports of Chinese e-commerce small parcels.


Gold Ticks Up with US Inflation Data on Radar

Gold bracelets and necklaces are displayed for sale at a gold shop in Istanbul's Grand Bazaar (AFP)
Gold bracelets and necklaces are displayed for sale at a gold shop in Istanbul's Grand Bazaar (AFP)
TT

Gold Ticks Up with US Inflation Data on Radar

Gold bracelets and necklaces are displayed for sale at a gold shop in Istanbul's Grand Bazaar (AFP)
Gold bracelets and necklaces are displayed for sale at a gold shop in Istanbul's Grand Bazaar (AFP)

Gold nudged higher on Tuesday as the US dollar slipped, with investors focused on upcoming inflation data that could shape expectations for the Federal Reserve's next policy move.

Spot gold was up 0.1% at $4,407.27 per ounce, as of 0645 GMT. US gold futures for December delivery fell 0.6% at $4,452.10, Reuters reported.

The US dollar index ticked 0.3% lower, making greenback-priced metals more affordable for other currency holders.

"Gold remains locked in a battle ⁠between buyers and ⁠sellers, with neither party showing enough conviction to drive a sustained and persistent directional move," said Chris Weston, head of research at Pepperstone Group.

The US producer price index data is due on Thursday and the consumer price index report is scheduled for Friday.

Spot gold fell in the previous two sessions after data showed ⁠US job growth accelerated sharply in August, while the unemployment rate held steady at 4.1%, suggesting an improvement in the labor market.

Traders see a 58.4% chance of a rate hike at the Fed's policy meeting next week, according to the CME FedWatch Tool. Elevated rates tend to reduce the appeal of non-yielding gold.

"We don’t see gold falling back too much if and when the central bank does raise rates. More important than the rate move is the notion that markets are somewhat uneasy about ⁠what the Fed ⁠and the Treasury are signaling," Marex analyst Edward Meir said in a monthly note.

On the geopolitical front, Iran threatened the United States with "economic warfare" and said it had fired an advanced missile at US warships, underscoring the risks of further escalation only days after both sides traded blows again.

Among other metals, spot silver gained 0.1% to $66.21 per ounce, platinum fell 0.1% to $1,824.58 and palladium lost 0.2% to $1,385.50.

Analysts at BMI cut their 2026 platinum price forecast to $1,900 per ounce from $2,000, and lowered their palladium forecast to $1,400 per ounce from $1,500, citing weaker automotive demand and a recovery in supply.


Global Diesel Supply to Stay Tight Through Winter, Industry Execs Say

Diesel prices are displayed at a gas station as prices hit a record high in the US, Friday, Sept. 4, 2026 in Minneapolis. (AP Photo/Ellen Schmidt)
Diesel prices are displayed at a gas station as prices hit a record high in the US, Friday, Sept. 4, 2026 in Minneapolis. (AP Photo/Ellen Schmidt)
TT

Global Diesel Supply to Stay Tight Through Winter, Industry Execs Say

Diesel prices are displayed at a gas station as prices hit a record high in the US, Friday, Sept. 4, 2026 in Minneapolis. (AP Photo/Ellen Schmidt)
Diesel prices are displayed at a gas station as prices hit a record high in the US, Friday, Sept. 4, 2026 in Minneapolis. (AP Photo/Ellen Schmidt)

Global diesel supply will remain tight due to a lack of spare refining capacity, Russia's ban on exports and the approach of peak winter demand, senior industry executives said on Tuesday.

The wars in Ukraine and Iran have impacted refineries in Russia and the Middle East, pushing diesel margins to record levels in Europe and the US, while reducing crude supplies to Asia.

"There's really a shortage of products because we're missing 2 million barrels a day from Russia, and we're missing nearly 2 million barrels a day ⁠from the Middle ⁠East," Vitol CEO Russell Hardy told the APPEC conference on Tuesday.

According to Reuters, Hardy said crude is in a better supply position than products as the Middle East is exporting about 9 million bpd of crude and 1 million bpd of products.

"We're still not running enough refining capacity to prevent those draws," he ⁠said.

"We keep eating into the surplus that exists around the world, and we're pretty much at the bottom of our stockpiles."

Mark Senn, senior vice president of global trading at Phillips 66, said most US refineries were already running flat out.

"When you're looking forward to a winter season coming where diesel stocks are quite deficit, you're setting up for an environment where that strength could continue in those markets," he added.

US diesel prices jumped to record highs late last week, while the product's ⁠crack spread, ⁠a measure of refining profitability, surged to a record intraday high of $108.02 a barrel on Wednesday.

Vitol's Hardy said high prices and the lack of available fuel supplies are expected to reduce global oil demand by about 1.5 million bpd in 2026 versus 2025.

He added that the gap between China's crude imports in 2025 and 2026 at 5 million to 6 million bpd is unsustainable and he expects the gap to narrow towards the end of the year so China will have sufficient fuel for winter.