Oil has rallied to the highest level since October 2014, in part also due to a supply disruption in the Gulf of Mexico from Hurricane Ida, following a period of demand uncertainty stemming from the delta variant of the virus. Asian demand for U.S. crude is rising as the energy crisis boosts prices for other grades that are priced against global benchmark Brent.

“Crude is now in a full speculative rally and buying frenzy” on the back of coal and gas shortages, said Vandana Hari, the founder of energy consultant Vanda Insights. The usual relief valves on the supply-side such as OPEC+ action or a spurt in shale output have been ruled out for now, with the only check on momentum being the demand response to higher prices, she added.

The energy crisis has contributed to China’s economy weakening in the third quarter, as electricity shortages in September forced factories to curb output or shut completely. The power outages also impacted crude processing last month, with refining rates dropping to the lowest level since May 2020.

India’s diesel consumption, meanwhile, is gathering pace with the onset of annual festivals, increasing sales to about pre-virus levels in the first half of October. The battered aviation sector is also poised for a boost, with the U.S. set to open its borders to vaccinated foreigners on Nov. 8.