Global oil markets are entering a more fragile phase after more than six months of war in the Middle East, with traders, producers and buyers arriving in Singapore for one of the industry’s most important regional gatherings amid renewed fears of price spikes, shipping disruption and fuel shortages.

The Asia Pacific Petroleum Conference comes at a moment when crude markets are no longer merely reacting to headlines from the U.S.-Iran conflict. They are adjusting to the possibility that the conflict has permanently changed trade flows, pricing relationships and the balance of power between producers and consumers.

China’s crude-import restraint remains one of the most important forces shaping the global oil market. Seaborne arrivals rose slightly in August from July, but they remained almost 40 percent below the levels seen before the Iran war began. That means the world’s largest crude importer is still absorbing much of the adjustment caused by disrupted Middle Eastern supply, even as Asia faces increasingly tight conditions in refined fuels such as diesel and gasoline.

The August figures show only a modest recovery. China imported about 7.14 million barrels per day of crude by sea, compared with 6.93 million barrels per day in July, according to Kpler data. That increase was small relative to the collapse since the start of the conflict. In the three months before the U.S. and Israeli attack on Iran on February 28, China’s seaborne crude arrivals averaged 11.41 million barrels per day. August imports were therefore 4.27 million barrels per day below the prewar average.

Fuel oil was supposed to be the one product with no scarcity problem. It is the residue at the bottom of the barrel, what remains after everything more valuable has been distilled off, and for decades the refining industry’s principal challenge with it was finding buyers.

It powers ships and some power stations because those were the only customers willing to burn something so heavy and so cheap. A global fuel oil deficit of 218,000 barrels per day in the third quarter is forecast, the first meaningful shortfall since the third quarter of 2025 when it was a marginal 6,000. Very low sulphur fuel oil in Singapore has risen 76 percent since the war began to just under 825 dollars a tonne, or 130 dollars a barrel, against a 40 percent rise in Brent.