China Galaxy Securities has released a research note indicating that, amid ongoing geopolitical disruptions, Brent crude oil prices are projected to fluctuate within a broad range of $80 to $95 per barrel in September 2026. The firm advises investors to closely monitor the progress of US-Iran negotiations, the navigability of key maritime chokepoints, and the operational status of oil production facilities in the Gulf region.

The brokerage suggests that with the onset of the traditional peak demand season in September and October, downstream sectors may see inventory replenishment needs. It recommends focusing on the polyester filament segment. Additionally, the firm suggests continued attention to assets with growth potential.

Oil price momentum strengthened in August

The monthly average prices for Brent and WTI in August were $88.1 and $82.4 per barrel, respectively, marking increases of 4.9% and 4.6% compared to the previous month. On the supply side, geopolitical tensions in the Middle East remain elevated. On August 29, Iran's Deputy Foreign Minister stated that Tehran had reached an understanding with Oman regarding the passage of vessels through the Strait of Hormuz, but the strait would not reopen until the US fulfills its commitments. Data from ShipVision indicates that the number of liquid bulk carriers transiting the Strait of Hormuz remains at relatively low levels.

On the demand side, refinery operations are showing divergent trends across major global regions. Domestically, the weekly operating rates for China's main refineries, large independent refineries, and Shandong independent refineries stand at 73.2%, 88.6%, and 58.4%, respectively. These figures represent increases of 3.0, 23.9, and 7.2 percentage points compared to the last week of July. Year-on-year, there remains room for recovery in the operating rates of main and large independent refineries. In the United States, refinery utilization was 97.4% for the week ending August 21, up 0.9 percentage points from the end of July, indicating high-level operations.

On the inventory front, US commercial crude oil inventories stood at 428.91 million barrels as of the week ending August 21, an increase of 21.92 million barrels from the last week of July.

The firm believes that with the expectation of recurring geopolitical conflicts, Brent crude prices are likely to trade in a wide range of $80 to $95 per barrel in the short term, until normal transit through the Strait of Hormuz is restored. Investors are advised to keep a close watch on the US-Iran negotiation process, the status of key sea lane traffic, and the condition of oil production facilities in the Gulf region.

China's apparent oil demand fell 8.9% year-on-year from January to July

During the first seven months of the year, China processed 397 million tons of crude oil, a year-on-year decline of 6.5%. Crude oil output reached 128 million tons, up 0.9% year-on-year. Crude oil imports totaled 283 million tons, down 13.2% year-on-year. Apparent oil consumption was 409 million tons, a decrease of 8.9% year-on-year, with foreign dependence at 69.2%, down 3.5 percentage points year-on-year.

China's apparent natural gas demand declined slightly, down 0.8% year-on-year

From January to July, China's natural gas production was 154.3 billion cubic meters, up 1.2% year-on-year. Imports were 94.1 billion cubic meters, down 2.6% year-on-year. Apparent consumption reached 243.3 billion cubic meters, a 0.8% decrease year-on-year, with foreign dependence at 38.7%, showing a narrow decline year-on-year.

China's apparent refined oil product demand fell 7.2% year-on-year from January to July

In the first seven months, China's refined oil product output was 219 million tons, down 7.2% year-on-year. Exports were 28 million tons, a decrease of 13.1% year-on-year. Apparent consumption of refined oil products was 210 million tons, down 7.2% year-on-year. Specifically, apparent consumption of gasoline, diesel, and kerosene changed by -2.5%, -5.5%, and +0.8% year-on-year, respectively.

In July, with a temporary easing of Middle East tensions, export controls on refined oil products were moderately relaxed while maintaining domestic supply stability. Monthly export volumes rebounded significantly from the previous month, though there is still room for improvement compared to the same period last year.

Risk warnings include the potential for intensified international trade frictions, interruptions in supply of key raw materials, weaker-than-expected downstream demand, and delays in project production reaching full capacity.