By the end of April to early May 2026, international oil prices continued to rise. On May 1, the new main front-month July contract for Brent crude oil was quoted above $110 per barrel. WTI briefly touched $110.31, setting a new high in more than four years. The core thread driving this round of gains—unlike previous cycles—has clear structural characteristics.

## Core reason: supply shocks dominate, with prices below theoretical values

The fundamental driver comes from geopolitics. The US-Iran conflict has entered its third month. Throughput through the Strait of Hormuz has plunged by more than 90%. Among roughly 14 million barrels per day of global crude oil transported, about 69 million barrels of Iranian oil are stranded at sea. The size of the supply-side shortfall is the largest in history. Yet strangely, such a shortfall has not pushed oil prices into the previously expected $150–200 range. Behind this are three layers of buffers: before the war, global crude oil inventories of 580 million barrels were released first, strategic reserves partially filled the gap, and demand naturally shrank due to high oil prices. More importantly, in the futures market, speculators generally believe the conflict will end quickly, which has already suppressed the price ceiling.

On the other side, the logic on the demand side is also changing—not inflation driven by demand, but a passive imbalance caused by geopolitics directly cutting off fuel supply chains at the source, with pricing power increasingly concentrated in the contest over the size of the supply gap.

The transmission path of this sudden shift in the oil market to the macroeconomy is clear: raise inflation → test central banks → suppress growth. CICC estimates that if oil prices rise to $120 for the year, the US CPI would be lifted by an additional about 2 percentage points, and GDP growth could fall to 1.3%. Market expectations for the Federal Reserve cutting interest rates have rapidly shrunk to around 24%. The yield on the 10-year US Treasury has held steady above 4.40%. Under the double squeeze of high oil prices and a tightening environment, the economy faces a real risk of a “stagflation-like” scenario.

For the cryptocurrency market, the impact of oil prices shows up more through the transmission of interest-rate expectation changes. Oil prices surge → inflation becomes sticky → the Fed is forced to maintain a tightening posture → nominal and real interest rates rise. This puts pressure on the valuation denominator side of risk assets. During this period, Bitcoin fell below $76,000. The transmission relationship has shifted from the previous positive correlation to a negative divergence driven by tighter liquidity expectations.

At the same time, the options market has produced noteworthy hedging signals. As oil prices broke above $110, the trading volume of Brent crude oil put options continued to exceed that of call options. “Smart money” is not aggressively betting that oil prices will soar; instead, it has begun hedging against tail risks such as “geopolitical conflict ending suddenly and an abrupt plunge in oil prices.” This divergence of “prices rising upward and options moving downward” indicates that the market’s overall focus is transitioning from “whether prices will rise” to “when prices will fall.”

Overall, the core logic behind this oil-market surge has already been thoroughly priced in by the market over the past few months. With the scale of the rare supply shortfall temporarily buffered by multiple factors, the urgency of a cyclical turning point is building up. The key contradiction that will truly determine the outcome is no longer simply about when the strait will reopen, but more about the interplay among inflation data, red lines in US-Iran negotiations, and the cross-coupling of financial conditions. #油价突破110美元