CITIC Securities | Middle East Conflict Continues, Global Oil and Gas Prices Surge Significantly

Author｜Han Jun, Liang Xiao, Zong Feng

1. The conflict in the Middle East has caused a sharp rise in global oil prices. Oil transportation through the Strait of Hormuz has decreased by over 90%, a critical chokepoint that carries about 20% of the world’s oil maritime shipments. In early March, US WTI and Brent futures broke $90 per barrel, rising 36% and 28% respectively in a single week; on March 12, Brent closed at $100.46 per barrel, surpassing the $100 mark for the first time, and on March 13, Brent and WTI quoted at $100.34 and $95.65 per barrel respectively. The IEA forecasts that global oil supply will decrease by 8 million barrels per day in March, with the four Middle Eastern countries collectively reducing output by over 6.7 million barrels daily. The 400 million barrels of strategic reserves released can only offset the supply gap for 20-25 days. The US plans to intervene by releasing reserves, increasing shale oil production, and diplomatic coordination, but these measures face significant limitations.

2. Qatar’s suspension of natural gas production has led to a substantial increase in European natural gas prices. The halt in liquefied natural gas (LNG) production by Qatar, combined with low European gas inventories, has caused the Dutch TTF natural gas futures to surge by over 67% this week. The sharp rise in both oil and natural gas prices has heightened global inflation expectations, complicating the decision-making of central banks worldwide to balance economic growth and inflation control.

The blockade of the Strait of Hormuz has caused a significant increase in international crude oil prices. The escalation of Middle Eastern conflict has nearly halted transportation through the Strait of Hormuz, which accounts for about 20% of global oil shipping. Current transit volume has fallen by over 90%. In early March, US WTI and Brent futures both exceeded $90 per barrel, with weekly increases of nearly 36% and about 28%; on March 12, Brent closed at $100.46, breaking the $100 barrier for the first time, and on March 13, Brent and WTI were quoted at $100.34 and $95.65 per barrel respectively. The IEA estimates that global oil supply will decrease by 8 million barrels per day in March, with the four Middle Eastern countries collectively reducing output by over 6.7 million barrels daily. The 400 million barrels of strategic reserves released can only cover the supply shortfall for 20-25 days. The US intends to intervene through reserve releases, shale oil production increases, and diplomatic efforts, but these approaches are limited.

Qatar’s suspension of natural gas production has caused European natural gas prices to soar. Due to Qatar, a major global exporter of natural gas, halting LNG production, combined with low European gas inventories, European natural gas prices have surged significantly, with the Dutch TTF futures increasing by over 67% this week. The sharp rise in natural gas and oil prices has collectively boosted global inflation expectations, creating a dilemma for central banks worldwide between supporting growth and controlling inflation.

Global trade risks under the ongoing escalation of the Russia-Ukraine conflict

The ongoing stalemate in the Russia-Ukraine conflict will severely impact trade routes related to Europe and Russia, potentially leading to a collapse of the global shipping system and even reversing the process of globalization. Investors are advised to closely monitor developments in the conflict, energy policies, and sanctions.

Global macroeconomic recovery below expectations

Under multiple factors such as escalating geopolitical conflicts, intensified supply chain challenges, and persistent inflationary pressures, the global economic recovery remains uncertain and difficult. If the macroeconomic recovery falls significantly short of expectations, global logistics and transportation demand could sharply decline.

Changes in policy regulation affecting logistics prices

In September 2022, the General Office of the State Council issued the “Opinions on Further Optimizing Business Environment and Reducing Institutional Transaction Costs for Market Entities,” which proposed promoting reductions in logistics service charges; strengthening regulation of charges at ports, freight yards, and dedicated lines; and standardizing fee behaviors of shipping companies, shipping agencies, and freight forwarders according to law. Changes in policy regulation may exceed expectations, leading to fluctuations in logistics company performance.

Significant rise in fuel costs

Due to fluctuations in international crude oil prices, logistics companies face the risk of substantial increases in fuel costs. Additionally, the instability in the international energy market caused by the Russia-Ukraine conflict increases pressure on domestic energy security, with energy prices at risk of rising sharply, further driving up logistics costs.

Han Jun: Chief analyst of global transportation and energy at CITIC Construction Investment Securities, previously worked at Shanghai International Shipping Research Center, with three years of government planning and market consulting experience. Has led or participated in over twenty decision-making consulting projects for the Ministry of Transport, Shanghai Transportation Commission, and port shipping enterprises. With ten years of securities research in transportation, covering shipping, ports, high-speed rail, express delivery, and logistics sectors, skilled at identifying cyclical and policy-driven investment opportunities. Ranked 5th in the 2021 New Fortune Best Analysts in the Transportation Industry.

Liang Xiao: Transportation industry analyst, master’s degree from Nankai University. Previously worked at China International Marine Containers (CIMC) Logistics, SF Holding, and JD Logistics. Participated in drafting the “Revision Suggestions for National Multimodal Transport Standards” and contributed to the 14th Five-Year Plan for transportation and logistics. Joined CITIC Securities Research Department in 2022, covering express delivery, warehousing and transportation, supply chain logistics, cross-border logistics, rail freight, and air logistics. Has extensive research experience and resources in transportation logistics, adept at identifying and uncovering long-term company value. Based in Beijing.

Zong Feng: Global energy and transportation analyst at CITIC Securities, with a focus on industry cycles, capital expenditure, and company fundamentals. Holds a double degree in finance and English from Beijing Foreign Studies University; a master’s in International Business Administration from Fudan University, and participated in a summer program at MIT. Previously worked at Deloitte China as a senior auditor, involved in audits of several large A+H listed companies; later worked at a primary market venture capital firm, responsible for early-stage project sourcing and investment decisions. Subsequently joined Western Securities, specializing in transportation industry research.

Research report title: “Ongoing Middle East Conflict Causes Significant Rise in Global Oil and Gas Prices”

Publication date: March 15, 2026

Published by: CITIC Securities Co., Ltd.

Report analysts:

Han Jun SAC ID: S1440519110001

SFC ID: BRP908

Liang Xiao SAC ID: S1440524050005

Zong Feng SAC ID: S1440525120004