On the morning of March 2, international oil prices surged significantly, with Brent crude opening up 13%, breaking through $82 per barrel. After the sharp rise, oil prices pulled back. As of 13:18 Beijing time, oil prices had retreated to above $70 per barrel, with Brent crude at $77.39 per barrel and WTI crude at $70.98 per barrel.
Previously, according to reports, Iran's Islamic Revolutionary Guard Corps announced on the evening of February 28 that it would prohibit any vessels from passing through the Strait of Hormuz. It was reported that as traffic of tankers and other ships through the Strait of Hormuz ceased, the strait was effectively closed.
In contrast, the S&P Oil & Gas ETF listed on the A-share market hit the limit-up at the open today before pulling back slightly; it is currently limit-up, quoted at 1.261 yuan. In the morning, oil-related ETFs led the gains.
Multiple oil-focused LOF funds saw batch limit-ups. Oil Fund LOF (160416), E Fund Crude Oil LOF (161129), and Southern Crude Oil LOF (501018) hit the limit-up, while Harvest Crude Oil LOF (160723) rose 9.85%. It is important to note that these funds recently issued announcements warning of premium risks, as their secondary market trading prices showed significant premiums. Oil Fund LOF (160416) was suspended from the market open until 10:30 on March 2; it hit the limit-up approximately half an hour after resuming trading.
A-share oil and gas stocks strengthened in the afternoon session. Petrochina Company Limited touched the limit-up, reaching its highest level since April 2015. The combined A+H share market capitalization returned above 2 trillion yuan, exceeding the sum of the market capitalizations of the other two major Chinese oil giants—China Petroleum & Chemical Corporation (600028.SH) and CNOOC Limited (600938.SH).
Previously, around 20 stocks, including CNOOC Limited, Keli Shares, Tongyuan Petroleum, New Jinneng Power Source, and Beken Energy, hit the limit-up. Shouhua Gas, Kaitian Gas, and Haimo Technology all rose over 10%.
On March 1 local time, a tanker attempting to pass through the Strait of Hormuz was struck. On the same day, Maersk issued a notice rerouting its Middle East to India to Mediterranean (ME11) and Middle East to India to US East Coast (MECL) services via the Cape of Good Hope. Maersk stated that, given the continued deterioration of the security situation due to escalating military conflicts in the Middle East and after close coordination with security partners, it decided to temporarily suspend future Suez Canal transits via the Bab el-Mandeb strait. Effective immediately, all ME11 and MECL routes will be rerouted via the Cape of Good Hope.
Analysts believe that attacks by the US and Israel on Iran, a member of OPEC, could lead to significant oil supply disruptions in the Middle East and, in a worst-case scenario, potentially trigger a global economic recession. Iran is OPEC's fourth-largest oil producer, with daily output slightly over 3 million barrels in January. The country borders the Strait of Hormuz, the most critical waterway for global oil trade.
According to Kpler data, the strait located between Oman and Iran is a key global crude oil transit route and a potential bottleneck. In 2025, approximately 13 million barrels of crude oil per day passed through the strait, accounting for about 31% of global seaborne oil flows. It connects major Gulf oil producers like Saudi Arabia, Iran, Iraq, and the United Arab Emirates to the Gulf of Oman and the Arabian Sea.
According to reports, Bob McNally, founder and president of Rapidan Energy, pointed out that traders are underestimating the threat posed by Iranian retaliation for US attacks to the market. He stated, "This situation is serious."
McNally said Iran could deter the US by threatening the safety of commercial shipping lanes in the Strait of Hormuz, an action that could drive oil prices above $100 per barrel. He noted that the market has not fully appreciated that Tehran possesses significant inventories of naval mines and short-range missiles, sufficient to severely disrupt shipping in the strait.
For global markets, the nightmare is not just the loss of Iranian oil but broader disruption to shipping through the strait. Saul Kavonic, Head of Energy Research at MST Marquee, said that if Iran successfully closes the Strait of Hormuz, the impact on the global oil market could be very severe. Kavonic pointed out, "This could push oil prices into triple digits, while LNG prices would re-challenge the historic highs of 2022."
Industry veterans emphasize that the bigger issue is the duration. McNally stated that the extent of the increase in oil and LNG prices would depend on the duration and scope of production and transportation disruptions in the Gulf region.
Goldman Sachs pegged the real-time risk premium for crude oil at $18 per barrel, corresponding to the bank's assessment of the impact of a complete six-week disruption of tanker traffic through the Strait of Hormuz. In a report, Goldman Sachs said this risk premium is equivalent to the market pricing in a disruption of 2.3 million barrels per day to global supply over one year. This premium assessment is based on a 15% weekend spike in IG Group Ltd.'s retail WTI price.
Goldman Sachs stated, "While we view risks to our forecast as skewed to the upside, history suggests that price spikes driven by geopolitical shocks and/or temporary supply disruptions can be short-lived."
However, the current global economy is weak, and oil price increases are also influenced by OPEC+.
Galaxy Futures believes that, according to market estimates, if Iran blockades the Strait of Hormuz, global oil product supply would be reduced by at least 15 million barrels per day. It should be noted that while VLCC traffic through the Strait of Hormuz accounts for about 20% of global seaborne oil, some alternative pipelines (such as Saudi Arabia's East-West Pipeline and the UAE's pipeline) can bypass the strait, collectively replacing approximately 2.5 to 5 million barrels per day of capacity. However, these pipelines are typically operating near full capacity. Of course, OPEC+ has historically played the role of a stabilizer in the crude oil market. Whether it will significantly increase production under the current situation is a core focus for the market.
Representatives from Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman also held an online meeting to discuss the international oil market situation and prospects. A statement said that, given current stable global economic expectations and low oil inventories, the eight countries decided to adjust production. To maintain oil market stability, the eight countries will flexibly adjust the pace of production increases based on market conditions.
However, on March 1 local time, Iran's Islamic Revolutionary Guard Corps warned that if Iran's oil and gas facilities are attacked, all oil and gas facilities in the region would be destroyed in response.
Galaxy Futures stated that, overall, crude oil is expected to experience high volatility after a significant gap-up opening in the short term, with sharply increased market trading risks. However, following the pattern of past conflicts, a sharp surge followed by a pullback is likely to be the main trajectory for future crude oil market fluctuations.
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(Disclaimer: Article content is for reference only and does not constitute investment advice. Investors proceed at their own risk.)
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