In the third quarter of 2026, oil markets experienced rising prices and refining margins due to ongoing tensions in the Middle East. The price of Brent crude increased from $72 per barrel at the beginning of July to $109 on September 15, reflecting the market's response to military developments in the region.
Analysis of Crude Oil Prices
The price of crude oil started the third quarter at $72 per barrel, the lowest level since February 2026. This price drop was due to increased oil flows from the Strait of Hormuz in June and an agreement signed on June 17. However, with the resumption of military attacks from July 7, prices quickly rose, surpassing $100 per barrel by July 23. During this period, crude oil prices fluctuated between $79 and $98.
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Factors Influencing Prices
On September 9, Brent crude prices once again exceeded $100 per barrel due to intensified military actions against energy infrastructure in the Middle East and Russia. Additionally, a decrease in crude oil imports to China since April 2026 contributed to a reduction in global oil demand. However, China's crude oil imports in the third quarter increased compared to May and June, restoring some demand to the market.
During this period, oil supply from U.S. strategic reserves significantly decreased, contributing to the tightening of supply resources in the market. Ultimately, prices averaged $104 per barrel in the last two weeks of the quarter, reflecting a balance between peace negotiations and the potential for broader conflict.
Refinery Performance and Refining Margins
U.S. refineries operated at an unusually high utilization rate in the third quarter of 2026, averaging 95% of refining capacity. This level represents the highest performance in the third quarter since 2019. Refining margins for transportation fuels also significantly increased due to limited supply. Specifically, gasoline and diesel refining margins rose sharply during this period, indicating a global supply shortage of these fuels.
For example, U.S. diesel inventories in the week ending September 25 were 13% lower than the five-year average, while gasoline and jet fuel inventories were 7% and 3% below their five-year averages, respectively. This situation could lead to further price increases in the future.
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