Morning Highlights: Brent Slips to $92 as Iran and Israel Halt Attacks After Trump Appeal; China May Crude Imports at Eight-Year Low, U.S. Jet Fuel Output Hits Record

Tuesday, June 9, 2026

Brent (August) $92.57 | WTI (July) $89.26 Brent -1.68 (-1.6%), WTI -2.04 (-2.2%), giving back most of Monday's 4% gain. China May crude imports fell to 7.8 million bpd, lowest since October 2017, against a 2025 average of 11.6 million bpd. Iran and Israel halt attacks following Trump appeal, both warn hostilities could resume; China May crude imports at eight-year low; U.S. jet fuel output hits record above 2 million bpd; U.S. Navy disables tanker attempting to reach Iranian port in violation of blockade.

Bottom Line

Iran and Israel halting attacks after a Trump appeal is another go at a de-escalation signal, with the familiar caveat that both sides explicitly warned they could resume hostilities. The market's 1.6% decline reflects the pattern - any reduction in immediate military tension gets sold, any escalation gets bought, and the underlying supply picture has not changed in either direction. Hormuz remains blocked, inventories keep drawing, and the diplomatic gap on core issues has not narrowed.

China's May crude import data is the number that is moving prices today more than the diplomatic noise. At 7.8 million bpd, imports are at their lowest since October 2017 and down roughly a third from the pre-war average of 11.6 million bpd. The key context Societe Generale provides is important - China's reduced buying is the largest single offset to the supply shock, bigger than the coordinated SPR releases from the U.S., Europe and Japan combined. That is an extraordinary statement that reframes how the market has been absorbing the disruption. China's 1 billion-plus barrel inventory cushion has been doing the heavy lifting, and every day that cushion draws down brings the point closer where China must return to the import market regardless of price. When that happens while the war is still running, the supply picture tightens materially and quickly.

ING's framing of the summer demand trajectory is the analytical point worth anchoring on. The seasonal demand uptick of more than 3 million bpd quarter on quarter in Q3 will arrive while inventories are already depleted and Hormuz flows remain near zero. The buffer is shrinking with every passing day, as ING put it, and the pace of inventory draws will only intensify through July-September. When monthly data confirms dangerously low stockpiles, the race for available barrels could push Brent back above $100. The market is currently trading the diplomatic optionality. The physical reality is building toward a tighter Q3 regardless of how the negotiations evolve.

U.S. jet fuel output hitting a record above 2 million bpd for the first time is a genuine supply-side response to the crisis. Refiners shifting yield toward aviation fuel, above-average refinery utilization and the resulting export surge to Europe and Asia have meaningfully softened what could have been a severe jet fuel shortage. U.S. domestic jet fuel inventories at 7% above the five-year average while Europe and Asia scramble for supply illustrates how the Atlantic Basin has absorbed the swing supplier role across every product category simultaneously.

Top Developments

Iran and Israel Halt Attacks After Trump Appeal, Warnings of Resumption Remain

Iran and Israel both said they halted attacks on each other following an appeal from Trump, reversing the escalation that sent prices up 4% on Monday after Israeli strikes on the Mahshahr petrochemical complex and fresh Lebanon attacks. Both sides explicitly warned hostilities could resume. The halt follows the pattern of tactical pauses rather than structural de-escalation -- Hormuz remains blocked, the U.S. naval blockade of Iranian ports continues, and the core diplomatic issues are unresolved. The U.S. military separately disabled an unladen oil tanker in the Gulf of Oman on Monday after it attempted to reach an Iranian port in violation of the blockade, with 24 Indian crew members reported safe.

China May Crude Imports at Eight-Year Low, Inventory Cushion Doing the Work

China's May crude imports fell to 33 million barrels total, or 7.8 million bpd, the lowest since October 2017 and down sharply from the pre-war average of 11.6 million bpd, Chinese customs data showed. Refinery run rates and fuel exports are also down as Beijing prioritizes domestic supply. Societe Generale described China's reduced buying as the largest single offset to the supply shock, larger than all coordinated SPR releases combined. The critical qualifier is that China's estimated 1 billion-plus barrel inventory cushion is finite - when it reaches the point where replenishment becomes necessary and the war is still running, the import demand return will be sharp and will coincide with the seasonal Q3 demand peak that ING estimates adds more than 3 million bpd quarter on quarter.

U.S. Jet Fuel Output Hits Record, Exports Filling European and Asian Gap

U.S. jet fuel production surpassed 2 million bpd for the first time on record in the week ended May 1 and has remained at elevated levels since, the EIA said Monday, as refiners shifted yields toward aviation fuel in response to prices that doubled from the start of the year. U.S. Gulf Coast jet fuel averaged $3.91 per gallon from March through May against roughly $2 at the start of 2026. Weekly export data indicates U.S. jet fuel exports hit record highs in April and May, with domestic inventories at 45 million barrels as of May 29 -- 7% above the five-year average -- providing continued export capacity. Europe and Asia, previously dependent on Middle East jet fuel via Hormuz, have been the primary recipients of U.S. and Nigerian export surges that have so far prevented physical shortages from materializing in either region.

Kuwait Offers Crude to Asian Refiners for First Time Since War Began

Kuwait Petroleum Corp is directly offering at least 4 million barrels of Kuwait Export Crude to refiners in China and South Korea -- the first such offer since the war began - carried on two VLCCs that have already exited the Strait of Hormuz, traders told Bloomberg. The UAE has also been selling millions of barrels from inside the Persian Gulf to Asian refiners. The offers are the latest indication that Gulf producers are finding ways to move barrels through Hormuz with increased U.S. coordination of transits, though flows remain far below pre-war levels. The fact that KPC is selling directly rather than through an intermediary and that the barrels have already cleared the strait removes execution risk for buyers and signals growing confidence that selective transits are becoming more reliable.