Haitong Futures: Crude Oil at the Crossroads of Geopolitics and Fundamentals

K-LinePoet · 2026-03-18T02:25:36+00:00

This week, geopolitical factors intensified market volatility. Crude oil prices experienced a brief decline due to rumors of Trump's "ceasefire" and G7 inventory releases, but subsequently rebounded as the bulls returned. The main contributing factors include the U.S. difficulty in gracefully exiting the Iran conflict, escalating U.S.-Iran tensions, and unclear strait transit conditions. Market confidence in the U.S. government has declined, while internal divisions within Iran are evident, creating conditions where oil prices tend to rise easily but fall with difficulty. However, the uncertainty surrounding Trump's policies continues to require cautious management.

K-LinePoet

2026-03-18 02:25:36

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This week’s geopolitical tensions continued to trigger market movements. On Tuesday, crude oil prices sharply declined after rumors of a ceasefire by Trump and news of G7 releasing reserves. The main SC contract nearly hit the daily limit down, as the market was in a “buy first, analyze later” mode, where any small fluctuation could cause a significant reaction. However, after two days of decline, bullish sentiment appeared to revive, with prices closing higher for three consecutive days on Wednesday. The main reasons for the rally are: 1. The U.S. struggling to exit the Iran conflict with dignity; 2. Escalation of US-Iran tensions, with ongoing clashes affecting civilian infrastructure and energy facilities; 3. The Strait of Hormuz being unable to accommodate large-scale shipping in the short term, with unpredictable changes preventing insurers and fleets from gaining clear stability.

At the same time, several issues are evident: 1. The U.S. government’s repeated claims of “winning” and unpredictable TACO policies have eroded its credibility in the market; 2. Iran shows clear signs of a “red and white face,” with the president and foreign minister advocating for de-escalation, while the Revolutionary Guard continues to escalate the situation.

Against this backdrop, oil prices have become more prone to rising than falling. However, due to the high uncertainty surrounding President Trump’s decisions, caution is advised when participating in the market. (Haitong Futures)

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