International crude oil is in a high volatile upward trend driven primarily by geopolitical conflicts. In the short term, it is supported by the situation in the Strait of Hormuz; in the medium term, it is underpinned by OPEC+ production cuts and demand recovery.
Geopolitics: Soaring Risks of Supply Disruptions
Strait of Hormuz Crisis: In the early hours of March 22, Iran announced the launch of a drill for its Strait of Hormuz blockade plan, warning that any U.S. and Israeli strikes on its territory would be met with counterattacks on key targets. Oil tankers have delayed entry, and navigation risks have risen sharply.
Spillover of Middle East Conflicts: Ongoing hostilities involving the U.S., Israel and Iran continue to disrupt shipping safety in the Red Sea and Persian Gulf, highlighting the fragility of the global energy supply chain.
Market Logic: Conflict ā Higher oil prices ā Inflation ā Lower gold prices. Safe-haven capital has shifted from gold to crude oil.
Supply Side: Continued Tightening and Widening Supply Gap
OPEC+ deeper-than-expected production cuts: The group maintains production cuts of 3.5 million barrels per day (including Saudi Arabiaās voluntary 1 million bpd cut and Russiaās 500,000 bpd cut) through the end of 2026. At its March meeting, OPEC+ confirmed only a modest output increase in April, which is far from enough to fill the supply gap.
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