Oil prices are back on the rise after selling off on reports of the incredible military successes by the US and Israel against the defenses of the Iranian regime. Yet oil is back on an upward track after Fox News reported on Wednesday that “thousands” of Iranian Kurds based in Iraq have “launched a ground offensive into Iran” following reports that the Trump administration was coordinating with Kurdish militias in the region to try to help destabilize the Iranian regime. That report added a new level off uncertainty but really moving higher as China is showing its concerns as their country is still heavily dependent on imported oil and products and the situation in Iran is forcing their hand and that is causing even more upside momentum in diesel and now .
According to a report published by Bloomberg, Chinese authorities have instructed their leading refiners to suspend all exports of diesel and gasoline. This serves as a reminder that China remains far from energy independent, importing more than 70% of its daily requirements. The country has relied on nations such as Iran, Russia, and Venezuela—often considered adversaries—for discounted, and frequently sanctioned, oil supplies to meet its energy needs.
The cut off is supply sent both the gasoline and diesel crack spread sharply higher again as China is a major player in global refined fuel markets, with gasoline and diesel exports influenced by domestic surplus, government quotas, and international demand.
Exports are tightly controlled through annual quotas issued by the Ministry of Commerce to balance local supply and demand. In 2025, China’s total refined petroleum product exports (including gasoline, diesel, jet fuel, and marine bunker) for the first 11 months reached 52.65 million tons, a 3.2% decline year-on-year. Gasoline exports specifically fell to 7.69 million tons over the same period, down 16% from 2024, with November alone at 610,000 tons (a 51.7% drop year-on-year). Diesel exports showed more resilience in spots; for instance, October 2025 saw 178,000 barrels per day (bpd), up 40% month-on-month and 54% year-on-year, driven by refiners shifting quotas amid shortages in other fuel types. Overall, 2025 exports reflected weakening domestic demand due to electrification in transport and economic slowdowns, leading to surplus production pushed overseas.
Yet as Bloomberg points out, “While the country is only the third-largest supplier of oil products into the region — its vast refining sector primarily serves domestic demand — China’s curbs just six days into a war reflect a scramble across Asia to prioritize domestic needs as the crisis in the Middle East deepens.
India is also scrambling as Reuters reports that refiners in India have started tapping Russian oil aboard vessels floating off the country’s coast to make up for the loss of Middle Eastern crude due to the Iran war, two sources with direct knowledge of the matter said on Thursday. India is vulnerable to energy supply shocks, with crude stocks covering only about 25 days of demand.
Yet this is a reflection of how US energy independence has made us stronger, not only from an economic viewpoint but from a national security stand point, something the previous administration was willing to sacrifice in the name of climate change hysterias, not to mention the billions of dollars they wasted on this with no discernible plan or with any measurable success.
And while we definitely have seen some upward movements in the price of oil, gasoline and diesel, we have to admit that it would have been a lot higher had we not used our own resources when it came to energy dominance. One of the ways you can measure that is looking at the contract which hit a high of $85.12 and that was more reflective about the concerns about tight supplies in Europe and Asia where here in the US the highest price we’ve hit in the US centric West Texas Intermediate contact since the conflict has been $78.09.
And the reason is clear: U.S. energy independence. I’m old enough to remember when we were so concerned about our inability to produce oil and that we would be vulnerable to other countries cutting off our supplies—like OPEC. Of course we remember what happened in the 1970s, and that’s one of the reasons we built the Strategic Petroleum Reserve.
But the best strategic reserve has been the shale revolution, which has changed the balance of energy dominance in the world. This was reiterated by Treasury Secretary Scott Bessent when he gave us the state of the oil market and even explained that we haven’t even begun to pull all the levers we have to stabilize prices. In the interview, Bessent said the White House believes the oil market is “well supplied,” in response to a question about whether the U.S. would release oil from its Strategic Petroleum Reserve. There are several actions the Trump administration could take to mitigate spikes in oil and fuel costs—among them a tax “holiday,” restricting U.S. crude exports, and tapping the SPR, as MarketWatch has reported.
While the futures markets in the back end of the curve is still predicting a short end to the war and a report that Western Official Estimates, “Iran Likely Has Just Days of Missile Strikes” the market still gets rattled by headlines as we move. Just this morning on Fox News Journalist Trey Yingst reported that Israeli Air defense just took down a few missiles on the outskirts of Tel Aviv. Interceptors from multiple locations. Those headlines continue to make the market nervous.
As do these: Reuters reported that – Foreign staff were evacuated from Iraq’s giant Rumaila oilfield, run by British energy major , opens new tab, after two unidentified drones landed inside the field on Thursday, three Iraqi oil industry sources told Reuters. “We are taking all necessary steps to support our partners and ensure the safety of our people,” a BP spokesperson told Reuters.
The markets going to be rattled on headlines. The big picture, we pray for our soldiers and we pray for a quick end of the conflict. We are going to see a lot of volatility and those who want to trade the products might be better off trading the crack spreads to reduce the volatility.
And while global natural gas prices are surging because of the concerns about Qatar shut down, here in the US we are still concerned about oversupply. As we gear up for today’s EIA release at 10:30 AM ET, the market is buzzing with anticipation amid shifting weather patterns and ongoing supply dynamics. Natural gas futures are holding steady this morning, with the April contract trading around $2.85/MMBtu on the NYMEX, reflecting a cautious sentiment after recent volatility driven by production rebounds and demand fluctuations. The EIA Storage Report and consensus estimate a 122 Bcf storage draw, following last week’s 52 Bcf withdrawal—which was higher than expected but showed reduced demand due to warmer weather. Current gas storage is 2,018 Bcf, about average for this time of year, suggesting smaller draws as heating season ends.
A 122 Bcf pull would align with seasonal expectations, given the five-year average draw for this time of year hovers around 120-140 Bcf, though recent weeks have shown variability due to production recoveries post-January freeze-offs. Remember winter?
If the actual figure comes in lighter (smaller draw), it could pressure prices downward, reinforcing bearish fundamentals with LNG exports steady at 19+ Bcf/d and U.S. output climbing back toward 108-110 Bcf/d.
On the flip side a larger-than-expected draw might provide short-term support, but the broader outlook from the EIA’s suggests inventories will end the withdrawal season (March) about 1% above the five-year average, thanks to robust supply growth projected at 2% for the year.
Yet for natural gas it is still about the weather and Fox Weather is highlighting a significant shift that’s likely to curb heating needs in the coming weeks. A rare split in the Polar Vortex is set to usher in warmer weather across the winter-weary Eastern U.S. starting early March, with milder Pacific air dominating much of the Lower 48. This positioning keeps the core cold air bottled up over Canada and Alaska, paving the way for an extended period of spring-like conditions.
The March outlook leans toward above-average temperatures in the central and eastern U.S., per the Climate Prediction Center’s 3-4 week forecast, which could reduce residential and commercial heating demand in key northern states. While this warmth previews summer-like intrusions, it’s not without volatility—expect an uptick in severe storms across the South and Midwest, but no major cold snaps on the horizon that would spike demand. Southern regions might see some cooling load creep in if temps push into the 60s-70s, but overall, this setup is bearish for Nat gas, potentially leading to softer prices unless supply disruptions emerge.
