Oil Prices Climb as Asian Imports Surge and Geopolitical Tensions Ignite Supply Fears

Oil Prices Advance on Renewed Market Momentum

Crude oil prices climbed on Tuesday, supported by a rebound in Asian imports and escalating geopolitical tensions that reignited fears of supply disruptions. Brent crude rose 1.2% to settle near $68.55 per barrel, while U.S. West Texas Intermediate (WTI) gained 1.1% to $65.06 per barrel.

The rally reflects a combination of stronger demand signals from Asia and concerns that geopolitical flashpoints could tighten global supplies further.

Asia’s Crude Appetite Rebounds

In August, Asia’s crude oil imports surged, led by China and India. Chinese refiners increased purchases from Middle Eastern suppliers, taking advantage of softer spot prices and government stockpiling programs. India boosted imports as refiners prepared for festive-season demand and rising domestic consumption.

The scale of the rebound raised questions across the market: is this the start of a sustained recovery in demand, or a temporary surge driven by opportunistic buying? Either way, the rise injected fresh bullish sentiment into global oil markets.

Geopolitical Risks Tighten the Picture

Supply-side concerns remain equally influential. Ukrainian strikes on Russian refineries in recent weeks have disrupted output, creating uncertainty about refined product availability in Europe. Meanwhile, simmering tensions in the Middle East continue to cast a shadow over OPEC+ production stability.

Together, these risks have underscored the fragility of global energy supply chains and helped push oil prices higher despite broader concerns about global growth.

Dollar Weakness Adds to the Rally

A softer U.S. dollar lent additional support. The greenback slipped near a five-week low ahead of the U.S. nonfarm payrolls report due later this week, making commodities priced in dollars more attractive to non-U.S. buyers. This trend amplified oil’s gains as traders positioned cautiously before the key labor market release.

Market Reactions Across Assets

Equities and Energy Stocks

Energy majors rallied alongside crude. Shares of ExxonMobil, Chevron, BP, and Shell all gained, while Asian refiners in Hong Kong and Shanghai also posted sharp advances on expectations of stronger import margins.

Currencies and Petro-Linked FX

Currencies tied to energy exports, including the Norwegian krone and Canadian dollar, firmed modestly against the U.S. dollar. Emerging-market currencies linked to commodity flows also stabilized after weeks of volatility.

Bonds

Bond yields held steady, reflecting investor caution ahead of U.S. payroll data, which could determine whether September brings a long-awaited Fed rate cut.

Analysts’ Perspective

Analysts cautioned that while the oil price climb reflects strong short-term momentum, sustainability depends on whether Asian demand holds up. If China’s rebound proves transitory or geopolitical risks ease, oil could quickly reverse gains.

“Oil markets are balancing on a knife’s edge,” a Singapore-based energy strategist said. “Demand from Asia is lifting prices now, but supply shocks are the real driver keeping traders alert.”

What’s Next for Oil?

Markets will closely watch three key developments in coming weeks:

1. Sustainability of Asian demand – whether China and India can maintain their import momentum into Q4.
2. Geopolitical disruptions – further refinery strikes in Russia or instability in the Middle East could push prices higher.
3. U.S. monetary policy – Fed decisions, guided by labor market data, will influence dollar direction and commodity flows.

The Bottom Line

Oil prices climbed on Tuesday, with Brent rising to $68.55 and WTI to $65.06, as Asian imports surged and geopolitical tensions fueled supply fears. While short-term momentum is strong, markets remain on edge, balancing rising demand with persistent risks of supply shocks.