(Source: China Petroleum Corporation 2026-03-05)
The United States and Israel have recently launched military strikes against Iran, causing sudden tension in the Middle East. Affected by this, oil tanker transportation in the Strait of Hormuz came to a standstill, and oil supply in the international market faced the risk of interruption, and international crude oil futures prices rose sharply. How will the situation in Iran affect oil prices? What impact will this round of rising oil prices have on ordinary consumers?Member of the expert steering committee of this journal,Dong Xiucheng, energy economist and executive director of the China International Carbon Neutral Economic Research Institute at the w88 casinoIn an interview with the media, he interpreted the above issues.
After the suspension of oil tankers in the Strait of Hormuz, international oil prices rose sharply. What is the reason?
Dong Xiucheng:The Strait of Hormuz is the only maritime outlet of the Persian Gulf, known as the "world's oil valve" and "maritime lifeline". It is the only channel for 1/3 of the world's seaborne crude oil and 1/5 of the world's total consumed crude oil. Once the Strait of Hormuz is blocked for a long time, it will be a "physical interruption" of the global energy supply chain, and there will be no short-term alternatives. There is currently no "real supply cut" in the international oil market, and the sharp rise in oil prices is based on the "expectation of supply cuts."
Currently, oil prices rise and fall almost every day. Can we see through the current market reaction whether it is short-term sentiment or essential judgment that is driving changes in oil prices?
Dong Xiucheng: The current oil price surges and falls in a single day, 90% of which is driven by short-term sentiment and risk premium, rather than the essential judgment of fundamentals (supply and demand/inventory/demand). Short-term sentiment is a typical feature of the current oil and gas market, with violent fluctuations, large single-day amplitudes, sharp openings, and fast closings. The rise and fall of oil prices is entirely tied to geopolitical, shipping, and conflict developments, rather than crude oil inventory and demand data. At present, the mainstream of funds in the market is speculation + hedging. Futures positions have surged, and funds are coming in and out quickly. High oil prices have no fundamental support, crude oil supply and demand have not substantially deteriorated, inventories have not collapsed, and OPEC+ still maintains a state of increasing production and stabilizing supply. Overall, the current oil price is "sentiment pricing unknown risks" rather than fundamentals pricing known supply and demand.
What are the key factors that determine the rise and fall of international oil prices?
Dong Xiucheng:There are five key factors that determine international oil prices. The first is the fundamentals of market supply and demand, which is the most fundamental "anchor" that determines oil prices; the second is geopolitical factors, which are the main catalyst for short-term fluctuations in oil prices; the third is financial and monetary factors dominated by the U.S. dollar exchange rate, which are the "hidden pushers" that affect crude oil pricing; the fourth is the adjustment of OPEC+ mechanism policies to maintain oil price stability by limiting oil production; the fifth is extreme weather, oil field/shipping accidents, pipeline explosions and other unexpected events. The surge in oil prices this time was dominated by geopolitical sentiment and expectations of channel blockade, but the fundamentals of supply and demand have not reversed. Once navigation across the strait is restored, the risk premium will quickly retreat.
How high will the oil price rise and for how long will it be obvious to ordinary consumers?
Dong Xiucheng:This issue requires first clarifying the price formation mechanism of my country's refined oil products. my country currently adopts a linkage mechanism between domestic refined oil prices and international crude oil prices. The price adjustment cycle is 10 working days (about 2 weeks), which is mainly linked to international crude oil prices. According to the formula, when the estimated price difference of domestic refined oil prices exceeds 50 yuan/ton, the refined oil price will be adjusted; otherwise, no adjustment is required. The international crude oil price buffer range is: 40-130 US dollars/barrel. When it is greater than 130 US dollars/barrel, domestic refined oil prices will not be adjusted, which is the ceiling; when the international crude oil price is less than 40 US dollars/barrel, domestic refined oil prices will not be adjusted. This is the floor price. The international oil price is in the range of 70-80 US dollars/barrel, and consumers are basically indifferent; the international oil price is 80-100 US dollars/barrel, and the domestic price of 92# gasoline has increased by 0.20-0.30 yuan/liter. A tank of oil costs 10-15 yuan more, and they are beginning to feel it. The international oil price is between 100 and 130 US dollars per barrel, and the domestic price of 92-proof gasoline has increased by 0.4 to 0.6 yuan per liter. A tank of oil costs 20 to 30 yuan more, and consumers have obvious feelings.
How important is oil in China's current energy consumption structure? To which industries does oil remain vital?
Dong Xiucheng:At present, petroleum is still the blood of China's industry and the cornerstone of chemical industry, playing a decisive role in the industrial system and energy security. In industries such as transportation, petrochemicals/basic chemicals, infrastructure and engineering, agriculture and people's livelihood, national security and high-end manufacturing, the role of petroleum is still irreplaceable.
What are the similarities and differences between this US-Israeli military strike against Iran and previous geopolitical conflicts in the Middle East?
Dong Xiucheng:In history, there have been many precedents where geopolitical events caused oil prices to skyrocket, but they did not last very long. Compared with historical events, the similarity between this US-Israeli military attack on Iran is that the geopolitical conflict in the Middle East has impacted oil transportation/supply, driving up oil prices and increasing risk aversion in the market. Energy importing countries have been harmed and exporting countries have benefited. The differences are: First, the nature of the impact is different. Historically, active embargoes/revolutionary shutdowns have led to long-term supply contraction (months to years), while this time it has been military strikes and strait blockades that have led to short-term logistics disruptions. The production capacity of Iran and other Middle Eastern oil-producing countries has not been hit yet, and some of it can be transferred through pipelines; second, the fundamentals of supply and demand are different. Historically, all The global oil supply exceeds demand, there is no buffer, and there is no strategic oil reserve. However, this time the global oil supply exceeds demand, OPEC+ has spare production capacity, and strategic oil reserves are sufficient. Third, the market structure is different. Historically, OPEC monopolized oil supply, had no shale oil, and no alternative routes. However, this time there are alternative routes such as US shale oil and insurance/shipping market-oriented regulation.
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