Over the weekend, the US-Iran conflict intensified rapidly. On the 28th, an explosion occurred in downtown Tehran, Iran's capital, air raid sirens sounded across Israel, and Israel announced it had struck Iran. On March 1, according to Iranian media reports, Iran's Supreme Leader Khamenei and several high-ranking Iranian military officers were killed in attacks by the United States and Israel. As a result, both domestic and international crude oil prices surged significantly. The main domestic crude oil futures contract hit limit up immediately at the opening. Although the limit was briefly broken during the session, it subsequently hit limit up again and held, driving gains across the petrochemical sector.
Looking ahead, short-term uncertainty and risks have intensified. Firstly, approximately one-third of the world's seaborne crude oil transits through the Strait of Hormuz, making it a critical pressure point in any escalation scenario. This would further push up already rising freight markets, introduce logistical friction, and tighten oil supplies. A more direct risk is targeted strikes on Iran's export infrastructure, including Kharg Island or offshore loading systems, which could remove related crude from the market within days rather than weeks. This can be likened to the US-Venezuela conflict earlier this year, which ultimately led to rapid control of Venezuela's energy resources, forcing it back to the negotiating table. However, this time Iran has lost its qualification for dialogue on equal terms. A deeper impact lies in the disruption of the trade balance pattern between major energy producers and consumer nations, thereby creating significant risks of price surges for consumer countries. Future attention should focus on the flow of oil and oil products through the Strait of Hormuz. Currently, war risk insurance premiums for vessels transiting the Strait have skyrocketed, which may force ships to reroute or wait at anchor for the situation to clarify. The impact of such disruptions would bring greater risks of price volatility to Asian markets. As oil prices are a significant inflation factor, the US is likely to maintain pressure to suppress oil prices ahead of the midterm elections to control inflation. However, it is crucial to note that the structure of energy supply has already changed, and vigilance is required against the risk of a sharp rise in landed costs for consumer nations, i.e., energy importers.
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