Just now, a collective sell-off! Oman, breaking news! CTA shockwave incoming

The shockwaves from rising oil prices are still reverberating!

Early Asia-Pacific trading saw Brent crude futures extend gains, reaching as high as $101.59 per barrel, a 10% intraday surge. Reports indicate that Oman is evacuating ships from the Mina Al-Fahal oil terminal. The port agency’s notice states that the evacuation is a precautionary measure.

Affected by the sharp rebound in oil prices, Asia-Pacific stock markets collectively declined. By the early close, the Nikkei 225 index fell 1.5%, and the Topix index dropped 1.6%. The Korean stock index, which had briefly turned positive in the morning, also fell over 1%. Hong Kong markets rose briefly but then pulled back. European stock futures declined, with the EuroStoxx 50 futures down 1.1%, and Germany’s DAX futures dropping over 1.2%.

Collective Decline

This morning, international oil prices again surpassed $100. Goldman Sachs forecasts Brent/WTI crude prices in Q4 2026 at $71/$67 per barrel, up from previous estimates of $66/$62. As oil prices surged, global stock indices also tumbled.

The Nikkei 225 closed down 1.5%, and the Topix fell 1.6%. Vietnam’s VN index declined 1% to 1710.59 points. The Philippines stock index dropped 1% to 6094.64 points. The Hang Seng Index fell over 1% in early trading, and the Hang Seng Tech Index also declined over 1%. Tencent Music, Bilibili, and SenseTime each fell more than 3%.

European stock futures generally declined, with EuroStoxx 50 futures down 1.1%, and German DAX and French CAC40 futures each dropping over 1.2%. U.S. stock index futures also fell more than 1%, with the US2000 down nearly 2.5%.

JPMorgan strategists said hedge funds are experiencing their largest drawdown since the market turmoil triggered by tariffs in April 2025, as short-term trading positions are being closed out. The report notes that since the outbreak of conflict between the U.S. and Iran, CTA (commodity trading advisor) and other quantitative funds have faced their worst hit in nearly a year. Equity long-short hedge funds, which are over-allocated in Europe and Korea but under-allocated in software stocks, have also suffered significant losses. Reports indicate that some of the world’s largest hedge funds, including Balyasny Asset Management, Castle, and Millennium Management, posted losses last week.

Currently, the market’s biggest concern is the long-term escalation of Middle East conflicts. If this occurs, asset pricing logic will inevitably change. Galaxy Securities believes that traditional valuation models consider U.S. Treasuries, the dollar, and core U.S. stocks as “safe assets,” but if the conflict persists, rising energy costs, weakening U.S. fiscal constraints, and damaged strategic credit could shake this system. Gold, energy assets, non-dollar currencies, and markets with supply chain resilience and geopolitical stability (such as China) may gain new premiums.

Breaking News from Oman

This morning, oil prices suddenly surged again, breaking above $100, possibly linked to the latest news from Oman.

According to individuals directly receiving port agency notices, Oman has evacuated all ships from the key oil export terminal—Mina Al-Fahal port—as a precaution. Fahal port, located outside the Strait of Hormuz, is one of the few ports still capable of exporting Middle Eastern crude oil globally. However, attacks in the region have made nearby waters unsafe. Data intelligence firm Kpler reports that Fahal port exports about 1 million barrels of Omani crude daily. Similarly, the UAE’s Fujairah port, also outside the strait, continues loading operations, but some shipowners are avoiding the port due to attack risks. Yemen’s port of Yanbu on the Red Sea coast remains capable of exporting oil.

Additionally, although U.S. President Trump claims the war will end soon, tensions in the Middle East show no signs of easing. The Israel Defense Forces issued a statement early on the 12th, saying they detected a new round of missile launches from Iran, with air defenses intercepting them. This is the second time that day Israel’s military reported monitoring Iranian missile launches. According to Xinhua, citing The Times of Israel, the IDF’s Home Front Command said that due to attacks from Iran and Hezbollah, the situation is expected to become more “difficult” in the coming days, with civil defense measures likely to continue at least until the 14th.

Furthermore, despite the International Energy Agency (IEA) releasing the largest-ever emergency oil reserves, oil prices continue to soar. This seems inconsistent with market expectations. Some analysts believe that, on one hand, the emergency release during the Iran conflict is still insufficient to offset the nearly halted oil transportation through the Strait of Hormuz, production disruptions in the Persian Gulf, and low oil inventories. On the other hand, this decision may backfire, as it could reinforce market expectations that the conflict will drag on for a long time.