The gas station line is over 100 meters long; if I top up my wallet again, I won't be able to hold on.

How AI and Geopolitical Conflicts Drive Global Oil Prices to Historic Highs

Produced by Tiger Sniff Business & Consumer Group

Author | Zhou Yueming

Editor | Miao Zhengqing

Header Image | Visual China

On March 22, 2026, in Beijing, as night falls, over a hundred meters of vehicles line up outside a Sinopec gas station in Chongwenmen, waiting to refuel.

The reason for this long queue is simple: after midnight on March 23, domestic refined oil prices will undergo a significant adjustment, and nationwide fuel prices are about to enter the 9-yuan era.

This will be the largest single price increase since 2026. At 24:00 on March 23, gasoline and diesel prices will rise by approximately 2,000 to 2,200 yuan per ton. In retail terms: 92-octane gasoline will increase by about 1.7 yuan per liter; 95-octane gasoline by about 1.8 yuan per liter.

For ordinary household car owners: filling a 50-liter tank will cost about 85 yuan more—equivalent to an extra meal out; filling a 70-liter SUV will cost over 120 yuan more.

Over a year, if you drive an extra 20,000 kilometers with a fuel consumption of 8 liters per 100 km, the additional annual expense from this price hike is conservatively estimated to exceed 2,700 yuan.

A Strait Blocks a Quarter of the World’s Oil

One major reason for the continued surge in oil prices is of course war.

The Strait of Hormuz, the only outlet from the Persian Gulf to the Arabian Sea, is about 55 kilometers at its narrowest point. A quarter of the world’s oil and nearly one-fifth of liquefied natural gas pass through here daily. Major Middle Eastern oil producers—Saudi Arabia, Iran, Iraq, Kuwait, the UAE—depend entirely on this waterway for exports.

In early March, as the US and Israel escalated military actions against Iran, this route faced severe disruptions. Several oil tankers had to reroute, insurance premiums soared, and some shipments were canceled.

The International Energy Agency described this as “one of the most severe supply disruptions in the history of the global oil market.” Goldman Sachs also warned that if the blockade persisted until the end of March, Brent crude could surpass its 2008 record high.

Currently, the crisis in the Strait of Hormuz seems unlikely to be resolved in the short term.

On March 21, Trump posted on social media, giving Iran a 48-hour ultimatum: “If Iran does not fully open the Strait of Hormuz within 48 hours, the United States will strike and destroy Iran’s power plants, starting with the largest one.”

This deadline coincides almost exactly with the domestic fuel price adjustment date.

However, Iran did not back down. The Iranian parliament speaker directly rejected the ultimatum that day, and Iran’s Supreme Leader had previously stated: “We will not abandon revenge; the Strait of Hormuz will remain closed.”

Of course, if it’s just geopolitical conflict, oil prices usually spike temporarily and then fall back. But this time, it’s different.

Over the past decade, under the pressure of energy transition and ESG (Environmental, Social, Governance) considerations, major international oil companies have sharply cut investments in traditional oil and gas fields. From 2015 to 2020, global upstream oil and gas capital expenditure declined by over 40%. As demand recovers, supply elasticity has already been worn down.

OPEC+ still maintains a daily production cut of about 2.2 million barrels, and US shale oil growth has become more conservative due to stricter capital discipline. This means the market has almost no “buffer” to absorb shocks. Any positive demand signal is amplified exponentially.

Domestically, the pressure is also mounting. After the Spring Festival, the resumption of work and production, peak logistics season, spring plowing preparations, and construction projects have pushed refined oil demand to its highest point of the year. Meanwhile, spring is also the season for refinery maintenance, with about 20% of refineries operating at reduced capacity. Both supply and demand are tightening simultaneously, causing prices to not only rise but do so rapidly.

Stop the bleeding—people’s wallets can’t take it anymore

The impact of soaring oil prices has already spread across various industries.

The airline industry is the “first victim” of rising oil prices.

Juneyao Airlines and Xiamen Airlines have both announced increases in fuel surcharges for some international routes, with the highest increase on flights from China to Indonesia, up to 600 yuan. Spring Airlines also raised fuel surcharges for international flights; for example, a flight from Shanghai to Jeju Island saw the surcharge jump from zero to 90 yuan.

Following the news of increased fuel surcharges, there was a wave of “buying tickets early” domestically. Many believe that high oil prices won’t end soon.

The impact on tourism is slower but more certain.

Long-haul international trips see increased overall costs, making some previously “cost-effective” destinations less affordable. Industry analysts predict that high ticket prices will suppress leisure travel demand for most of 2026.

Beyond airlines, ride-hailing drivers are among the first to feel the impact of rising fuel costs, and they are among the hardest to pass on.

A ride-hailing car with 8 liters per 100 km consumes about 24 liters daily if driven 300 km a day. With a 1.7 yuan increase per liter, daily fuel costs rise by about 40 yuan, totaling over 1,200 yuan extra per month. For drivers earning around 7,000 to 8,000 yuan monthly, this represents a 15%–20% reduction in income.

How will they absorb these costs? Perhaps drivers will bear it temporarily, platforms may offer some subsidies, and passengers will notice longer wait times or slightly higher fares during peak periods. All three parties are under pressure, but the burden is uneven.

High fuel prices are also reshaping car purchasing decisions, prompting owners to recalculate.

Refilling a 92-octane tank at over 9 yuan per liter, driving 20,000 km annually with 8 liters per 100 km, costs over 15,000 yuan in fuel each year at 9.3 yuan per liter.

In comparison, an electric vehicle consuming 15 kWh per 100 km, at a residential electricity rate of 0.6 yuan per kWh, costs about 1,800 yuan annually in electricity. The difference is roughly 13,200 yuan.

High fuel prices won’t directly cause people to buy new cars, but they accelerate existing considerations—especially for those planning to buy and with high commuting mileage.

Under the combined influence of government subsidies and high fuel prices, the transition from oil to electric vehicles in 2026 may accelerate faster than previously expected.

Rising oil prices will transmit along the “crude oil → logistics → goods → services” chain. Increased courier costs, higher cold chain expenses for supermarkets, rising delivery costs for takeout, and increased circulation costs for agricultural products are all affected. Studies estimate that a 10% increase in oil prices can raise CPI by about 0.1–0.2 percentage points and PPI by about 0.5 percentage points.

This “hidden inflation” could genuinely squeeze discretionary spending. It’s not a single large expense but a gradual reduction—fewer items in the shopping cart, a twenty-yuan decrease in per-person restaurant spending, or postponed short trips.

In summary, people’s consumption budgets are quietly being rewritten.