Good morning. Let's start with updates from international markets.
Oil prices experienced a sharp decline. Earlier, reports indicated that Saudi Arabia's Yanbu port had halted oil shipments, causing Brent crude futures to surge over 8% and break through the $110 per barrel mark. Subsequently, sources revealed that the port had resumed oil loading activities, leading to a narrowing of Brent's gains.
In the early hours, international oil prices fell due to easing tensions in the Middle East and other factors. At market close, the main WTI crude futures contract dropped 0.19%, while the primary Brent crude futures contract rose 0.2%.
Precious metals also saw significant declines. On Thursday evening, spot gold prices fell more than 6%, approaching the $4,500 per ounce level. Spot silver prices broke below the $66 per ounce threshold, hitting their lowest point since February 6 with a daily plunge of 12%.
Global stock markets and government bonds declined simultaneously. European equities fell sharply during trading hours, and the three major U.S. stock indices opened significantly lower. By the close, Germany's DAX 30 index dropped 2.53% to 22,907.91 points. France's benchmark index fell 1.73%, Italy's declined 2.29%, and the UK's index decreased 2.39%. All three major U.S. indices closed lower, with the Dow down 0.44%, the Nasdaq down 0.28%, and the S&P 500 down 0.28%.
During Thursday's New York late trading, gold and silver price declines moderated. Spot gold fell 3.42% to $4,653.01 per ounce, while COMEX gold futures dropped 4.86% to $4,657.80 per ounce. Spot silver declined 3.33% to $72.85 per ounce, and COMEX silver futures fell 6.29% to $72.840 per ounce.
Analysts suggest that Middle East conflicts have driven up energy prices and intensified inflation concerns, leading markets to anticipate that major central banks will maintain higher interest rates, thereby pressuring risk assets.
Daniel Ghali, TD Securities commodity strategist, stated, "Gold has become a widely held asset among institutional investors, primarily driven by 'currency depreciation trades' over the past year. However, the foundation for this trade is now weakening. In the short term, we still see downside risks for gold prices."
SP Angel analysts noted that gold's decline is also influenced by profit-taking and a stronger U.S. dollar. Following significant gold price increases in 2025, investors locking in gains, addressing margin call pressures, and shifting funds to energy assets like oil represents a rational market response.
Iran launched its 66th wave of strikes, while Israel's Prime Minister announced a suspension of airstrikes on Iranian energy facilities, with former President Trump making statements.
According to reports, Iran's Islamic Revolutionary Guard Corps declared that it conducted the 66th round of military operations using various heavy multiple-warhead missiles and drones targeting central and southern Israel, as well as U.S. military bases in the Middle East.
Israeli Prime Minister Benjamin Netanyahu stated at a press conference that Israel "unilaterally" carried out airstrikes on Iranian gas fields and would "comply" with former President Trump's request to "pause" subsequent attacks on energy facilities.
Trump earlier stated at the White House that he had informed Netanyahu not to target energy facilities within Iran.
Oil exports from major Gulf producers plummeted approximately 61%. Data shows that from March 1 to 19, 69 vessels transited the Strait of Hormuz, including 61 liquid cargo ships and 8 LPG carriers, with no LNG vessels recorded. Compared to the pre-conflict daily average of 77 vessels on February 28, daily transit volume in March has plunged to fewer than 4 vessels—a drop exceeding 95%—bringing commercial shipping nearly to a standstill.
In the week ending March 15, average daily oil exports from eight major Gulf producers reached 9.71 million barrels. These countries exported an average of 25.13 million barrels daily in February, indicating a dramatic 61% decrease.
Analysts warn of potential large-scale production shutdowns in some oil-producing nations. Due to escalating Middle East conflicts, crude oil prices have risen sharply since March. Multiple analysts indicate that the effective blockade of the Strait of Hormuz has already caused supply disruptions, and the first phase of oil price spikes may not be over. Market focus is shifting from "how much prices will rise" to concerns about inflation and even stagflation.
The Strait of Hormuz is a critical artery for global energy transport, handling about 20 million barrels of crude and petroleum products daily. According to March IEA reports, Middle Eastern producers have been forced to cut production by approximately 10 million barrels per day, with about 78 million barrels of oil accumulating in floating storage.
Although Saudi Arabia's alternative transport routes are operating at full capacity with nearly 7 million barrels per day capacity, only 5 million barrels are available for exports after deducting 2 million barrels supplied to western refineries, insufficient to cover the supply gap. The longer the Strait remains blocked, the higher transportation and insurance costs will rise, ultimately reflected in oil prices.
Recent Middle East tensions have substantially impacted normal oil trade through the Strait of Hormuz. Most vessels are currently adopting a wait-and-see approach, with transit volumes expected to remain low in the short term. Current supply reductions exceed those during the 2022 Russia-Ukraine conflict. If conflicts spread to other Middle Eastern countries and threaten ports beyond the Strait, some temporary supply disruptions could become permanent losses.
Current global crude supply deficits approach 8 million barrels per day in March, exceeding reductions during the 1973 oil crisis. Middle East Dubai crude spot prices have surged to $155 per barrel, with a spread over Brent futures exceeding $55, directly reflecting regional supply shortages. Asian crude imports have dropped 32% month-over-month, forcing refineries to pay premium prices for supplies from the Americas and Africa. If the Strait remains blocked for over 21 days, storage capacity in some Middle Eastern producers will be exhausted, potentially leading to large-scale production shutdowns.
Looking ahead, this week's temporary 60-day waiver of the Jones Act aims to reduce transportation costs for oil, gas, and other commodities within the U.S. The spread between Brent and WTI crude futures has widened. With ongoing geopolitical tensions and supply disruptions, energy commodities are expected to maintain strength with high volatility.
Even if the Strait reopens and floating storage is released, oil prices are unlikely to quickly return to pre-conflict levels due to the time required to restore production facilities. Sustained high oil prices could push downstream petrochemical enterprises into losses. Combined with reduced expectations for Federal Reserve rate cuts, high oil prices would further constrain the global economy. Medium-term, sustained high prices could accelerate the elimination of inefficient refining capacity globally. With the petrochemical sector currently at a cyclical bottom, energy and chemical product prices may see further increases.
