In early trading in Asia, the price of Brent crude oil futures fell, as the market is reassessing the demand for oil.

As of 4 am Greenwich Mean Time, the Intercontinental Exchange (ICE) Brent crude oil December contract price dropped to $78.14 per barrel, down 90 cents from the October 11 settlement price; while the contract dropped 36 cents from the previous trading day at the end of trading on October 11.

New York Mercantile Exchange (Nymex) crude oil November contract prices also experienced a decline, to $74.68 per barrel, down 88 cents from the October 11 settlement price; the contract dropped 29 cents from the previous trading day at the close on October 11.

Market participants continue to closely monitor China's oil demand forecasts.

As the main destination for Iranian oil exports, China is particularly sensitive to possible export interruptions resulting from escalated tensions in the Middle East Gulf region. Any disruption to Iranian oil supplies could force refining companies in Shandong, China to reduce refinery throughput unless local refining margins improve.

On October 11, the government led by US President Biden imposed sanctions on 23 oil tankers and 16 shipping and trading companies suspected of helping Iran sell crude oil to China.

The US Treasury Department rapidly implemented a series of sanctions throughout 2024, with the October 11 sanctions action taken following Iran's missile attack on Israel at the beginning of October, which was a broader response. Treasury Secretary Janet Yellen stated: "In response to Iran's attack on Israel, the US is taking decisive action to further weaken Iran's ability to fund and carry out its destabilizing activities."

According to Baker Hughes data, in the week ending October 11th, the total number of drilling rigs in the United States increased by 1 to reach 586. Among them, the number of oil drilling rigs increased by 2 to reach 481; the number of natural gas drilling rigs decreased by 1 to 101; the number of other types of drilling rigs remained unchanged at 4.

BP plc expects that its downstream business profit in the third quarter will be affected due to decreased refining margins and weak performance in oil trading. However, the company stated that upstream oil and gas production exceeded expectations.

In its latest trading update, BP plc disclosed that the global refining margin averaged $16.50 per barrel from July to September, a decrease from $20.60 in the previous quarter and $31.80 in the same period last year.

Earlier this week, Shell, Repsol of Spain, and OMV of Austria also reported significant declines similar to those.

(The above content is from Argus, an independent international energy and commodity price assessment agency)