(Source: China-Singapore Jingwei 2026-03-09)
On the 9th, international crude oil futures prices rose sharply again, with WTI crude oil futures and Brent crude oil futures prices exceeding the US$110 per barrel mark.
It has been a week since the United States and Israel launched air strikes on Iran. Why did oil prices suddenly surge at this time? How should investors choose?
“Early-stage risks are underestimated”
Looking back on the past two trading days, crude oil futures prices have risen sharply.
As of the close on March 7, Beijing time, the April contract price of WTI crude oil futures closed at US$90.90 per barrel, an increase of 12.21%; the May contract price of Brent crude oil futures closed at US$92.69 per barrel, an increase of 8.52%. That week, the prices of the April contract of WTI crude oil futures and the May contract of Brent crude oil futures increased by approximately 35.60% and 27.88% respectively.
On March 9, crude oil futures prices rose violently again. WTI crude oil futures prices once rose by approximately 31.44%, reaching a maximum of US$119.48 per barrel; Brent crude oil futures prices once rose by approximately 28.92%, reaching a maximum of US$119.50 per barrel. As of press time on the 9th, the prices of WTI crude oil futures and Brent crude oil futures remained at around US$100 per barrel, with gains that day hovering around 10%.
Since the United States and Israel launched air strikes against Iran on February 28, crude oil futures prices have shown a significant upward trend. However, judging from the single-day increase, the increases on March 7 and 9 were higher than those in the previous trading days.
Regarding the sharp rise in oil prices, Caitong Fund told Sino-Singapore Jingwei that the market's risk pricing has upgraded from "anticipated risk premium" to "realistic supply interruption premium." Last week, the market traded on the probability of the outbreak and de-escalation of the conflict. This week, it is faced with the certainty gap in energy supply and the time it may take. The degree of blockage of the world's key energy arteries may be re-priced by the market. The decline in the Japanese and Korean markets also confirmed the market's accurate re-pricing of "fragile economies in the Middle East energy conflict", marking the market's shift from emotional fluctuations to substantial risk pricing.
“Oil prices did not ‘suddenly rise’, but the early risks were underestimated.”Dong Xiu, Executive Dean of the China International Carbon Neutral Economic Research Institute, w88 casino成said that after March 5, the supply crisis was fully realized, superimposed on panic and capital resonance, forming a delayed but violent surge. The core was that the conflict in the Middle East escalated from "local attacks" to "near shutdown of the Strait of Hormuz + multi-country production cuts", and the market turned from "wait and see" to "panic pricing". The superimposed resonance of futures funds and inventory bottlenecks resulted in a delayed but violent explosion.
Dong XiuchengFurther analysis of Sino-Singapore Jingwei shows that in the early stages of the US-Israeli attack on Iran (February 28 to early March), market risks were underestimated, and only "local supply disturbances" were included. It was believed that Iran would not block the strait, oil-producing countries could still export normally, and oil prices only rose slightly. The key turning point was March 5-6, when the supply crisis became real and shipping in the Strait of Hormuz was almost paralyzed: oil tankers were suspended and detoured, oil flow in the strait plummeted by 90%, and about 20% of the world's shipping crude oil channels were blocked. Oil-producing countries were forced to cut production: Iraq's output plummeted by 60% (from 4.3 million barrels per day to 1.7 million barrels per day), and Kuwait and the United Arab Emirates announced production cuts due to oil storage saturation and shipping safety threats.
“Under this situation, institutions collectively raised their warnings, with Goldman Sachs and JP Morgan warning that the supply gap would reach 3 million barrels per day to 6 million barrels per day. By March 9, panic broke out completely, Asian trading jumped at the opening, and WTI crude oil futures and Brent crude oil futures prices rose sharply.”Dong XiuchengSay.
Dong XiuchengIt was also added that this round of sharp rise in oil prices is also related to factors such as tight supply balance, strong financial speculation, rising demand, expectations of downward adjustments in the U.S. dollar and interest rates, rising logistics and insurance costs, and insufficient inventory buffers. The resonance of these factors with geopolitical risks has amplified the increase in oil prices.
Where will oil prices go in the future?
Dong Xiuchengbelieves that the current oil price is an extremely high level of the triple resonance of "geopolitical panic + hard supply gap + financial speculation". It has seriously deviated from fundamentals, implying a geopolitical premium of US$15/barrel to US$20/barrel. Before the conflict, global supply and demand were relatively loose (excess of about 2 million barrels per day to 3.7 million barrels per day), and the normal center should be between US$70 and US$80. The reality is "the Strait of Hormuz is almost shut down + Iraq and other countries are reducing production + oil storage is saturated", with a gap of 3 million barrels per day to 6 million barrels per day. The superposition of crazy long futures funds has pushed the international oil price to more than US$100 per barrel. This high oil price is highly vulnerable. Once navigation in the Strait of Hormuz resumes, oil-producing countries resume production, OPEC+ increases production, etc., the premium will collapse quickly, leaving huge room for correction.
For future oil price trends,Dong XiuchengGives three scenario analyses. First, the base scenario (very likely): the conflict is controllable and crude oil futures prices fall back to US$90/barrel to US$100/barrel. The triggering conditions are the resumption of navigation in the Strait of Hormuz within 1 to 2 weeks, the landing of U.S. escort or insurance, the resumption of production in Iraq/Kuwait, and the release of idle production capacity by OPEC+. As the geographical premium falls and supply and demand return to the fundamentals of loose supply, non-OPEC (for example, Brazil, Guyana) incrementally fills the gap.
The second is a neutral scenario (more likely): the conflict lasts for several months, and the oil price remains at US$110/barrel to US$120/barrel. The triggering conditions are the intermittent navigation of the Strait of Hormuz, saturation of oil storage, forcing more oil-producing countries to suspend production, and insufficient OPEC+ production increase. Due to high transportation and insurance costs, the gap persists and risk premiums remain high.
The third is an extreme scenario (less likely): a complete blockade and the expansion of conflicts, and oil prices rushing to US$130/barrel to US$150/barrel. The triggering conditions are a complete blockade of the Strait of Hormuz for more than a week, an attack on oil production facilities in Iran or other Gulf countries, and a "real" risk of global supply cuts. The consequences of this scenario are serious, triggering global stagflation and putting aviation, chemicals, consumption and other sectors under comprehensive pressure, recreating the oil crisis and global economic crisis of the 1970s.
Jin Ye, fund manager of the Galaxy Value Growth Hybrid Fund, told Sino-Singapore Jingwei that the current period is a period of high oil prices. If the conflict in the Middle East does not end, the possibility of oil prices maintaining high levels or continuing to rise cannot be ruled out. Even if the conflict in the Middle East eases in the future, the low after the oil price decline may be higher than the bottom of $60/barrel in early 2026 due to the destruction of facilities and the time it will take to restore transportation.
Pay attention to geopolitical “black swans”
Purchasing fund products is one of the important ways for ordinary domestic investors to participate in oil investment.
In the first week after the current round of conflicts in the Middle East (March 2 to 8), public funds with a cumulative return rate of more than 10% in the market were all oil and gas products, such as E Fund Crude Oil, Southern Crude Oil, Harvest Crude Oil, CCB Esheng Zhengzhou Commercial Exchange Energy and Chemical Futures ETF, Universal China Securities Oil and Gas Resources ETF, etc.
Oil prices were rising even before the conflict in the Middle East. Judging from the performance of ETF products, as of the close of trading on March 9, there were 14 ETFs in the market with a cumulative return rate of more than 30% during the year, and they were basically oil and gas themed ETFs. Among them, the cumulative returns during the year of the Wells Fargo S&P Oil and Gas Exploration and Production Selected Industry ETF and China Universal CSI Oil and Gas Resources ETF were approximately 49.84% and 46.40% respectively.
Some products have seen substantial premiums in the secondary market. After the market closed on the 9th, the S&P Oil and Gas ETF Harvest announced that the fund would be suspended from trading on March 10 until 10:30 that day, and would resume trading at 10:30 that day. The Wells Fargo S&P Oil & Gas Exploration and Production Select Industry ETF issued an announcement on the 9th to remind that since the secondary market transaction price premium has not effectively fallen, the fund has the right to apply for temporary intraday trading suspension, extension of trading suspension time and other measures to warn the market of risks.
The Macro Strategy Department of Boshi Fund told Sino-Singapore Jingwei that, catalyzed by the US-Iran conflict, crude oil prices are still on an upward trend, but may return to the fundamentals of supply and demand after the impact.
Dong XiuchengReminder: "The geopolitical 'black swan' is the biggest risk." If Iran continues to block the strait and attacks oil tankers or oil production facilities, the risk of conflict will spill over. If there is a sudden ceasefire between the two sides or the resumption of navigation in the strait, oil prices may fall. Under both scenarios, oil prices could jump or plummet by US$10/barrel to US$20/barrel in a single day.
Ye Peipei, fund manager of the China-European Fund Cycle Group, told Sino-Singapore Jingwei that in terms of resource investment, strategic resources will receive a sustained "geographic premium", and profits and valuations will be re-evaluated. It is recommended to focus on strategic small metals (military metals represented by tungsten), oil and coal chemicals, aluminum, gold, energy metals (lithium carbonate), copper and other industrial metals. Jin Ye said that since the surge in oil prices will bring about inflation and global economic recession expectations, it may put certain pressure on the equity market. Upstream oil, coal, gas, coal chemicals, agrochemicals, etc., which benefit from energy inflation and are not highly correlated with the global macroeconomic performance, may be worth paying attention to.
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