The spillover effects of high oil prices continue to manifest, with each link in the industrial chain enduring a harsh "test by fire."

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Reporter Xu Xiaoru and Wei Shuguang from Securities Times

The sudden escalation of the Middle East situation has caused unprecedented intense turbulence in the global energy market, also putting all parts of the industry chain through a harsh “test.”

Since March, international oil prices have surged from around $70 per barrel, reaching a peak of nearly $120, then rapidly falling back to around $80, creating an epic震荡行情. On March 12, Brent crude oil prices again broke through $100 during trading, with 12 domestic energy and chemical futures hitting the daily limit early in the session, and the Wenhua Commodity Index reaching a near two-year high.

The Strait of Hormuz in the Middle East, known as the world’s energy artery, if cut off, would rewrite the pricing logic of global energy, chemicals, agriculture, and even macro financial assets. In response to this round of oil price震荡, Securities Times reporters recently interviewed multiple futures analysts, traders, and industry insiders to trace the transmission path of the commodity markets under the impact of geopolitical conflict.

Market Mechanisms Amplify Volatility

As a critical passage for global energy transportation, the Strait of Hormuz handles key transportation of petrochemical raw materials in Asia. Data shows that by 2025, about 60% of naphtha imports, 45% of liquefied petroleum gas (LPG), and around 50% of methanol imports in Asia depend on this route. If blocked, the energy supply chain will quickly come under pressure.

Since the US and Israel attacked Iran, international oil prices have risen sharply within just over ten days from around $70 per barrel. On March 9, Brent crude futures hit a high of $119.50 per barrel, the highest in nearly four years. Then, Brent futures quickly dropped back above $80, creating an extreme "roller coaster"行情. On March 12, fears of supply disruption resurfaced, pushing Brent crude futures above $100 again and reigniting bullish sentiment in the domestic commodities market, with 12 energy and chemical products like PTA, PX, bottle chips, short fibers, and ethylene glycol hitting the daily limit. However, in the afternoon, many of these gains narrowed, with only para-xylene closing at the limit.

Ping An Futures analyst Li Chenyang believes that the core logic behind this surge in oil prices is the “certainty of supply contraction” caused by the escalation of the Middle East situation, with the blockage of the Strait of Hormuz being the key trigger. “The current conflict is no longer just an emotional disturbance but is beginning to fundamentally change the pricing logic of crude oil and even global macro assets through tangible supply shocks.”

Guangfa Futures Research Institute head Zhang Xiaozhen also pointed out that the main variable in current oil price trends is the navigation status of the Strait of Hormuz. “If the strait resumes navigation, oil prices are likely near a temporary peak; but if the blockade continues, as inventories are gradually depleted, the market will send clear warning signals: first, the spot premium will continue to widen, and futures spreads will strengthen; second, the correlation between downstream chemical prices and crude oil will further increase, with volatility possibly exceeding that of crude oil itself.”

However, Zhang Xiaozhen believes that this extreme forecast requires multiple conditions to occur simultaneously, including a blockade lasting over a month and the conflict spreading to key oil-producing countries in the Middle East. Currently, the probability of such scenarios is decreasing. On one hand, rapid oil price increases will significantly boost global inflation pressures, possibly prompting major economies to release strategic petroleum reserves; on the other hand, oil exports are Iran’s economic lifeline, and a long-term blockade would severely impact its economy.

Meanwhile, financial market mechanisms have also amplified oil price volatility. Previously, silver experienced a single-day plunge of 35%, and the recent sharp fluctuations in oil prices have also been accompanied by short-selling and quantitative trading effects.

Li Chenyang states that when a geopolitical conflict triggers such a sudden factor, quantitative trading strategies tend to further amplify crude oil price fluctuations. In a sharply trending market, trend-following quantitative strategies will almost inevitably contribute to the rise or fall. When oil prices break through key psychological thresholds like $90 or $100 per barrel, many models will trigger buy signals simultaneously, resulting in large buy orders in a short period and accelerating the upward slope of prices.

Downstream Chemical Market Worries About Supply Disruption

The impact of transportation disruptions has quickly propagated to the chemical industry chain. The decline in transportation efficiency through the Strait of Hormuz will first affect raw material arrivals and then rapidly transmit to the cracking end.

According to ICIS, the average operating rate of ethylene plants in Northeast Asia is expected to drop from 83% in February to 73% in March. Meanwhile, chemical spot market prices have surged rapidly, with PX prices rising over 22% in a week, PTA prices up more than 20%, and on March 9, Sinopec PX spot prices increased by 400 yuan/ton to 8,600 yuan/ton. However, as oil prices retreated, chemical prices also saw some correction on March 10.

“Domestic plastics and chemicals industry quotes, which were around 10,000 yuan/ton, have now returned to about 8,000 yuan/ton,” said Ye Chen, assistant general manager of major energy and chemical trader Jiayue Trading Group. “In just one day, the spot market fundamentals didn’t change much, but market sentiment fluctuated greatly, even more than futures. Most of our inventory was hedged through futures, so although spot prices rose more than the futures market, hedging helped avoid significant operational risks.”

However, the company still faces considerable pressure amid such volatile行情. “We prepared sufficient margin for hedging positions in advance; otherwise, in extreme行情, forced liquidation could occur. For private enterprises with limited capital, this is crucial,” Ye Chen said.

In contrast, many spot traders are more worried about “supply cuts.”

A manager at a plastic company in Hangzhou said they have activated force majeure clauses in contracts, negotiated price increases with clients, and extended some delivery periods.

Zhang Xiaozhen pointed out that in the current high-volatility environment, the core of hedging strategies should be “optimizing structure rather than simply increasing positions or stop-loss.” For downstream industries, it is advisable to adopt a “front-month contracts as main, longer-term contracts as supplement” approach to avoid over-hedging and missing cost transfer opportunities. If a hedged position incurs unrealized losses, it is not advisable to blindly stop-loss but to adjust contract months and roll over to lock in long-term costs.

Supply Shocks Spread to More Commodities

Supply shocks originating from the crude oil market are spreading to more commodities.

According to Refinitiv data, on March 9, the global benchmark for thermal coal—ICE Newcastle coal futures for the next month—rose about 9.3%, reaching $150 per ton, the highest since November 2024. Compared to February 27 before the Middle East escalation, the price has increased approximately 28%. The European market also reacted strongly, with Rotterdam coal prices reaching $119.50 per ton, a 52-week high.

Additionally, the fertilizer market has experienced significant fluctuations.

Iran is a major exporter of nitrogen and phosphate fertilizers, and tensions in the Middle East have rapidly tightened global fertilizer supplies. As of last week, U.S. urea prices had risen to $550 per ton, up about $70 in a week.

This change has begun to impact agricultural markets. Yang Lulin, chief analyst at Guomao Futures Agricultural Products, said that the core logic of vegetable oil prices remains the “oil—biodiesel—vegetable oil” transmission chain. When crude oil stays high, vegetable oil prices tend to rise and be difficult to fall, similar to the行情 during the Russia-Ukraine conflict in 2022. However, if geopolitical tensions ease and oil prices fall sharply, vegetable oil prices could also see a significant correction.

Meanwhile, rising fertilizer prices may alter global crop planting structures. “Soybeans have nitrogen-fixing properties and are less dependent on fertilizers. If fertilizer prices continue to rise, U.S. farmers might shift some corn planting areas to soybeans in the spring of 2026, affecting the long-term supply pattern of agricultural products,” Yang Lulin said. The market is closely watching the upcoming USDA planting intentions report.

Prolonged High Oil Prices May Drag Down the Global Economy

From an industry chain perspective, cost transmission is showing clear differentiation.

Zhang Xiaozhen pointed out that current cost transmission features “upstream smooth, mid- and downstream hindered.” Upstream sectors like oil, gas, and PX have achieved a high rate of cost pass-through, mostly fully transferred; midstream sectors like polyester and synthetic rubber have a slightly lower transmission rate, with companies absorbing some costs by compressing processing fees; downstream sectors such as textiles, home appliances, and automobiles are limited by weak demand recovery and find it difficult to pass on costs, resulting in lower transmission rates.

“If oil prices stay above $100 per barrel for more than a month, many small and medium-sized enterprises may face production cuts or halts, forcing a rebalancing of supply and demand in the industry chain. When terminal industries start showing negative feedback, the expected disruptions on the supply side will weaken, and the market may shift focus to demand-side trading and transmit back to upstream,” said Zhang Xiaozhen.

Li Chenyang believes that the key impact of high oil prices on the global economy depends on how long they last. “Short-term increases over a few weeks mainly affect market sentiment, but if oil remains near $100 for two to three months, it will significantly raise transportation and manufacturing costs and erode consumer purchasing power.”

Caution is needed that sustained high oil prices could force global central banks to tighten monetary policies again, creating a “resonance” with high energy costs and accelerating economic downturns.

“If the supply crisis cannot be alleviated in the coming weeks, and oil prices stay above $110 per barrel into the second quarter, the probability of a global recession in the second half of the year will increase significantly,” Li Chenyang said.

Additionally, high oil prices will push energy transition efforts. In recent years, amid multiple energy crises, global companies have shifted from “passive response” to “主动转型.” Shipping, chemicals, and other industries are exploring diversified energy alternatives, with some energy-intensive companies accelerating PV and wind power projects and trading green electricity to reduce costs.

However, Zhang Xiaozhen states that energy transition is a long-term process. In the short term, companies still need to use futures hedging, raw material substitution, cost reduction, and efficiency improvements to cope with high oil prices while seizing structural opportunities brought by the transition. In the long run, high oil prices will continue to push industry chain optimization and accelerate the shift toward cleaner and diversified energy structures.