StanChart Warns Oil Is Now Built for Sharper, More Frequent Spikes

By Alex Kimani – Sep 13, 2026, 6:00 PM CDT

Oil prices briefly approached $110 as hopes for a quick U.S.-Iran resolution faded, with Standard Chartered expecting continued volatility and increasingly sharp upside price spikes.
Diesel, gasoil and jet fuel remain particularly tight, as depleted inventories, limited spare capacity and logistical disruptions leave refined products especially vulnerable.
Europe’s gas crisis is also intensifying, with prices above €81/MWh, storage at a 15-year seasonal low and Qatari LNG exports through Hormuz still severely constrained.

Oil prices hit nearly $110 per barrel on Thursday for the first time since July, with no end in sight for the Middle East conflict. The IRGC announced on Wednesday that it had attacked and heavily damaged eight oil tankers and two U.S. Navy destroyers in the Strait of Hormuz, in retaliation after the U.S. military destroyed five IRGC-linked oil tankers in the Gulf of Oman on Tuesday night. CENTCOM has, however, denied the IRGC claims. Hopes for a quick resolution to the war have also faded after U.S. President Donald Trump said that the war is unlikely to end before the midterm elections in November, while advisors have allegedly warned him the war could last for the rest of his term. By Friday morning at 7:10 a.m. ET, Brent crude was trading at $103.58, while WTI was trading at just over $98. And now oil and commodity analysts at Standard Chartered have predicted that the ongoing sharp oil price gyrations on headlines will continue through the third quarter amid the ongoing stalemate in the US-Iran conflict, with little sign that diplomatic progress will relieve export restrictions through the Strait of Hormuz.

StanChart says middle distillates remain extremely strong, with some venues under extreme stress as heat and drought compound logistical bottlenecks. The bank expects the strength in middle distillate cracks (the price difference between a barrel of crude and the fuels a refinery makes from it) to continue, with diesel, gasoil and jet outperforming gasoline. Expectations that the conflict keeps dragging on are pushing some of that strength into longer-dated contracts, StanChart says. The bank forecasts oil averaging $77.50 a barrel in 2027 on returning demand (particularly from China’s imports) and the need to both refill and expand depleted strategic reserves.

Meanwhile, the 42nd annual APPEC (Asia Pacific Petroleum Conference) in Singapore concluded on Thursday, with market participants appearing increasingly positioned for a prolonged Middle East conflict.

According to StanChart, China’s rebounding appetite for crude imports, alongside its ability to redirect refined product supplies to increasingly tight Asian markets, has emerged as an important potential source of flexibility in global oil flows. Consumers are increasingly placing greater value on optionality across crude grades, suppliers, refining configurations and product sources after repeated disruption reshaped established trade flows.

The energy experts see oil markets remaining vulnerable to oil price spikes: whereas alternative barrels can often be found, there is progressively less spare capacity, inventory and logistical slack available when multiple disruptions occur simultaneously.

StanChart says the price implication is increasingly asymmetric, with a market characterized by more frequent and sharper upside price spikes, even if rallies are subsequently faded. The upside tail is getting fatter, with volatility commanding a greater premium. This implies that refined products will continue to be more vulnerable to disruptions than crude.

At the same time, Europe’s natural gas rally is showing little signs of slowing down, with prices rising above €81/MWh on Thursday, the highest level since December 2022 in large part due to the Middle East disruptions. A Qatar-loaded LNG carrier sailed through Hormuz on 8th September bound for Pakistan. The transit followed several empty Qatar-linked LNG carriers returning towards the Persian Gulf, providing the clearest evidence yet that Qatar may be testing the feasibility of restarting exports through the waterway. However, StanChart notes that substantial uncertainty remains around whether this represents the beginning of sustained exports.

Outbound LNG flows from the Persian Gulf remain well below pre-war levels, while QatarEnergy recently extended force majeure on LNG deliveries to European and Asian buyers into October and November. Qatar has also continued operating Ras Laffan at reduced rates, keeping equipment operational and retaining the flexibility to ramp up more quickly if conditions permit. StanChart says a short-term spurt of exports of LNG already loaded onto vessels inside the Gulf is possible without signalling a sustained recovery in Qatari supply, noting that repeated safe passage alongside evidence of a broader production ramp-up before the markets materially reduce the supply-risk premium embedded in European gas prices.

Meanwhile, stronger Continental Northwest Europe (CNWE) storage injections, alongside fresh unplanned curtailments at key Norwegian gas assets, have tightened Europe’s gas balance. European storage stands at just 66% of full capacity, 12 percentage points lower than the same period last year and marking a 15-year low for this time of year. To exacerbate matters, the deficit is heavily concentrated in Europe’s largest economies, with Germany’s inventories at 54% while the Netherlands is at 48%.

Experts have warned that Germany could see a demand-supply gap as wide as 25% on peak January days if winter temperatures come in lower than expected.

By Alex Kimani for Oilprice.com

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