Fuel prices are displayed at a gas station in Streamwood, Illinois, on Wednesday (local time). [AP]
Fuel prices are displayed at a gas station in Streamwood, Illinois, on Wednesday (local time). [AP]

Global oil prices surged more than 4% after reports emerged that China would halt exports of petroleum products, with energy markets rattled further by news that the US Department of Defense plans to deploy additional troops to the Middle East.

December-delivery Brent crude closed up 4.37% at $102.31 per barrel on the ICE Futures Exchange on Thursday (local time), while November-delivery West Texas Intermediate finished 2.71% higher at $92.87 per barrel on the New York Mercantile Exchange.

Oil prices, which had been relatively stable for several days, spiked Thursday after reports that China would suspend petroleum product exports. Reuters, citing four sources, reported that Chinese refiners had decided to halt exports of petroleum products to all regions except Hong Kong and Macau until further notice from authorities.

Prices turned sharply higher following the news. Hamad Hussain, chief economist at Capital Economics, said China's fuel export restrictions "will act as another pressure point on a global fuel market where supply is already extremely tight."

Adding to concerns over energy supply disruptions, the US Department of Defense announced plans to deploy additional forces to the Middle East, with reports suggesting large-scale airstrikes could follow after the midterm elections.

The Wall Street Journal, citing US government officials, reported Thursday that the Pentagon plans to send a third aircraft carrier strike group and Marine Corps vessels to the region by the end of next month. An additional 9,000 to 10,000 troops are also expected to be deployed to the Middle East.

With tensions between the United States and Iran escalating in the Middle East, petroleum product supplies already strained by strikes on Russian refining facilities, and China now halting its own exports, concerns are growing that an oil supply shortage could deepen ahead of the winter season.


kate01@heraldcorp.com