The "9 yuan" era for oil prices has not fully arrived yet.

As of now, the price of refined oil has been adjusted six times in 2026, mainly with increases. In March, the price of refined oil has completed two rounds of adjustments. On March 9, gasoline and diesel prices were raised by 695 yuan/ton and 670 yuan/ton, respectively. This time, on March 23, domestic gasoline and diesel prices were each raised by 1160 yuan and 1115 yuan per ton, which is lower than previously expected.

This is due to the government’s intervention to control oil prices, leading to a nationwide average increase of about 0.85 yuan per liter for gasoline and diesel.

Therefore, the previously predicted comprehensive entry of 92 gasoline prices into the “9 yuan” era has not yet arrived.

For consumers, changes in oil prices are directly reflected in the rapid increase in refueling costs. From a more macro perspective, its impact is gradually transmitted along the path from energy, logistics, manufacturing to end consumption.

Impact of Middle East Situation

From the source, the recent rapid rise in oil prices is due to changes in the geopolitical situation in the Middle East, especially the increased safety risks of key shipping lanes.

For a long time, the Strait of Hormuz has been considered a key passage for global oil transport, with about 30% of the world’s crude oil needing to pass through it. Once disruptions occur in this area, not only is the actual transport capacity limited, but more importantly, the market’s expectations of supply interruptions quickly magnify, pushing oil prices to form a risk premium.

In the current situation, the shipping system has shown significant changes. On one hand, some oil tankers are forced to detour, extending transport cycles; on the other hand, shipping insurance costs have risen significantly, compounded by security risks, leading to a rapid increase in overall transport costs.

Data shows that international oil prices surged from $82 per barrel to $112 within 20 days, an increase of over 36%. Since China has a high dependence on foreign crude oil, significant fluctuations in international oil prices will inevitably transmit to the domestic market through the current refined oil pricing mechanism.

This impact has not remained at the energy end, but has spread along the industrial chain to the automotive industry. For example, in the logistics sector. Whether it is the transportation of refined oil or the export of complete vehicles, both are highly dependent on the shipping system. When key shipping lanes are blocked, transport efficiency declines, and uncertainty in shipping schedules increases, directly affecting the delivery pace of complete vehicles.

Multiple sources indicate that some international shipping companies have suspended passage through related high-risk sea areas, leading to many transport vessels being stranded and a temporary breakdown in the global logistics system. For export-dependent automakers, this means increased inventory pressure and passive adjustments to production schedules.

Next is the raw materials sector. The Middle East is not only a source of crude oil but also an important source of fossil raw materials. A tightening supply of naphtha will transmit to basic chemical products like ethylene, further affecting the prices of materials such as plastics and synthetic rubber. These materials are widely used in automobile manufacturing, from tires to interiors, and the cost changes will be amplified at each layer, ultimately reflecting in the overall manufacturing costs of vehicles and compressing corporate profit margins.

For example, Japanese automakers have proactively reduced production or scaled back specific market operations due to the risks in shipping lanes. This indicates that geopolitical conflicts have shifted from external disturbances to endogenous variables affecting the operation of the automotive industry.

For the Chinese market, the same impact exists. Rising international oil prices not only directly push up domestic refined oil prices but also indirectly affect automotive production and distribution through transportation and raw material costs. Against this backdrop, rising oil prices are no longer just a terminal consumption issue but have evolved into a cost transmission chain that runs through the industrial chain.

However, from another perspective, this change also exerts a certain degree of pressure on the industry. Cui Dongshu, secretary-general of the Passenger Car Association, believes that the rise in oil prices increases usage costs while also impacting market structure, helping to reduce low-level repeated competition and pushing companies to shift from simple price competition to product and technology competition.

In other words, the recent rise in oil prices has dual attributes: it exerts cost pressure on the industrial chain while also promoting structural adjustments within the industry. This dual effect makes its impact more complex and persistent.

At the same time, the uncertainty of the Middle East situation means that this impact is difficult to dissipate in the short term. Unlike previous oil price cycles driven by supply and demand fluctuations, such geopolitical factors tend to last longer and have a more profound impact on market expectations.

Fatih Birol, head of the International Energy Agency (IEA), recently stated, “This crisis is more severe than the two oil crises of the 1970s combined.”

Morgan Stanley issued a warning in its latest research report: if international oil prices remain stable above $120 per barrel, it will pose a substantial downward threat to economic growth in Asia. The bank’s quantitative model estimates that for every $10 increase in oil prices, it will directly drag down overall GDP growth in Asia by about 20 to 30 basis points.

However, on March 23, international oil prices experienced a sharp drop. U.S. President Trump posted on social media that he had a “very good and productive” conversation with Iran. As a result, international crude oil and natural gas prices fell. New York crude oil futures and Brent crude oil futures prices briefly dropped by about 13%.

The 9 Yuan Era Has Not Arrived Yet

In response to the two consecutive price increases in March, the most intuitive reaction from the market has been the long lines at gas stations. This is a natural response from consumers facing surging living costs.

China’s refined oil prices are adjusted based on a pricing mechanism linked to international oil prices. Specifically, this operates on a ten-working-day cycle. This mechanism sets international market crude oil prices as the benchmark and determines domestic oil price increases or decreases by calculating the rate of change of the weighted average price of international crude oil over the ten-working-day period.

As long as the price adjustment amount exceeds 50 yuan per ton, it will trigger an adjustment; if it is less than 50 yuan, it will be accumulated until the next cycle. The two price adjustments in March were triggered against the backdrop of rapidly rising international oil prices. Especially within the adjustment cycle, crude oil prices remained in an upward range, causing the reference rate of change to continue to maintain positive values and expand, ultimately leading to a significant increase.

Looking back at oil price trends since the pandemic, it has shown distinct phase characteristics. In early 2020, affected by shrinking global demand, international oil prices once fell to a trough, and domestic oil prices lingered in the “5 yuan era” for an extended period.

However, with the global economic recovery and rising energy demand, coupled with OPEC+'s ongoing production cuts, oil prices began to enter an upward channel. In 2022, driven by geopolitical conflicts, international oil prices once broke through $120 per barrel, and domestic oil prices also approached peaks, with 92 gasoline entering the 9 yuan era.

In the following years, although oil prices have eased, they have still generally remained at relatively high levels. Entering 2026, influenced by Middle Eastern geopolitical conflicts, oil prices again experienced rapid rises, concentrated in March.

The impact of this change on the end is direct and perceptible. Before and after the price adjustments, the queueing phenomenon at gas stations reappeared, with many car owners choosing to refuel before the window period. This behavior is not only a short-term response to the price increase but also reflects uncertainties regarding future oil price trends.

The impact of high oil prices on people’s livelihoods is evident. Some netizens have calculated that for ordinary car owners, driving 1,500 kilometers a month means an extra fuel cost of 100 to 200 yuan per month, while for ride-hailing and freight groups, the monthly increase in fuel costs can reach as high as 5,000 yuan.

So when will oil prices see a decline? In this regard, Cui Dongshu believes that in the short term, it is difficult for oil prices to return to previous low levels.

This is mainly constrained by several factors: the geopolitical situation in the Middle East is unlikely to calm down in the short term, shipping risks in the Strait of Hormuz still exist; OPEC+ continues to cut production, keeping global crude oil supply in a tight balance; coupled with international crude oil inventories being relatively low, any disturbances on the supply side could trigger price fluctuations. This means that high oil prices will not be a short-term phenomenon, and both consumers and businesses need to be prepared to cope.

To control oil prices and ensure stable economic operation and social livelihoods, the government has intervened. The National Development and Reform Commission stated that, based on maintaining the existing pricing mechanism framework, temporary measures have been taken to control domestic refined oil prices.

Originally, according to the current pricing mechanism, domestic gasoline and diesel prices should be raised by 2205 yuan and 2120 yuan per ton, respectively, which would fully push 92 gasoline prices into the 9 yuan era. However, in order to mitigate the severe fluctuations in international oil prices and reduce the impact on people’s daily travel, domestic gasoline and diesel prices were raised by 1045 yuan and 1005 yuan less, respectively, keeping the national 92 gasoline price around 8 yuan per liter.

Opportunities for New Energy?

Against the backdrop of rising oil prices, many people are simultaneously complaining about high oil prices while beginning to consider whether to switch to new energy vehicles for their next car. Clearly, structural changes in the automotive market are beginning to emerge. Some gasoline vehicle owners say that previous discount promotions at gas stations, such as equal pricing for 95 and 98 gasoline, have now basically been canceled.

From the situation at the beginning of the year, the new energy market once faced adjustment pressure. With the purchase tax incentive policy halving in 2026, there was a phenomenon of advance consumption in the market, leading to a phase decline in demand at the beginning of 2026. Data from the Passenger Car Association shows that in February, retail sales of new energy passenger vehicles fell by 32% year-on-year to 464,000 units, with penetration rates dropping to about 45%.

At the same time, the fuel vehicle market seized the window of opportunity, achieving some recovery in sales by increasing end discounts. In February, retail sales of conventional fuel passenger vehicles reached 570,000 units, with a decline (-19%) smaller than that of new energy vehicles. The “strong oil, weak electricity” start led the industry to generally believe that 2026 would be a defensive year for new energy vehicle growth to slow and fuel vehicles to maintain their basic market share.

However, this judgment has changed with the rise in oil prices. Compared to purchasing costs, the cost of using the vehicle has a more lasting impact on consumers. When oil prices enter a high range, the usage costs of fuel vehicles rise significantly and begin to occupy a more important position in purchasing decisions.

From market feedback, more and more consumers are beginning to pay attention to “total usage costs” when buying cars, rather than just focusing on purchase prices. This shift has re-highlighted the economic advantages of new energy models.

Cui Dongshu pointed out that the rise in oil prices will create a certain pull on new energy vehicle consumption. When fuel costs remain high, the cost advantages of new energy vehicles will become more apparent, thereby influencing consumer choices. Especially in the price range of 100,000 to 150,000 yuan in the family car market, consumers are highly sensitive to usage costs, and rising oil prices may become a key factor in prompting them to switch to new energy.

Market data also reflects this trend. The Passenger Car Association expects retail sales of new energy passenger vehicles to be around 900,000 in March, with penetration rates recovering to over 52.9%. This indicates that after experiencing adjustments at the beginning of the year, the new energy market is regaining growth momentum. Although fuel vehicles have pushed terminal discounts down to 24%, the rise in oil prices has driven up usage costs, hindering the recovery trend.

However, the new energy market itself still faces challenges. One is that the impact of policy reductions has not been fully digested; second, issues such as charging facilities and regional differences still limit the release of some demand.

At the same time, from the perspective of enterprises, the new energy market also faces pressure on profitability and intensified competition. Although the sales structure may improve, price competition has not completely dissipated, and companies still need to find a balance between cost control and product upgrades. Therefore, rising oil prices are more about improving the demand-side environment rather than directly solving supply-side problems.

From a longer-term perspective, the replacement of fuel vehicles by new energy vehicles is essentially a result of technological advancement and industrial upgrading. High oil prices only reinforce the economic logic in this process. In other words, even without rising oil prices, the penetration rate of new energy vehicles would still increase, but the rising process might be smoother. It is just that under the current environment, this process is significantly amplified.

In summary, the automotive market in 2026 is undergoing a structural rebalancing. In the early stage, fuel vehicles were supported by price advantages while new energy faced pressure due to policy adjustments; entering March, as oil prices rose, usage costs became a key variable, and the advantages of new energy reemerged.

Thus, this round of rising oil prices acts more like a “corrective force” for the new energy market—while it has not changed the direction of industry development, it has recalibrated the existing rhythm at critical junctures. In this process, consumers’ choice logic, corporate product strategies, and market structural distribution are all changing. These changes reflect the deeper impacts of this round of rising oil prices.

(Author: Wang Zhiqiang HF013)

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