Global crude markets experienced a powerful rally on August 18, with Brent futures breaking through the $91 per barrel mark during intraday trading. Meanwhile, the domestic SC crude oil main contract surged more than 6% at its peak, briefly exceeding 600 yuan per barrel. The entire energy complex caught fire, with fuel oil, low-sulphur fuel oil, and LPG all advancing over 4% as of the latest update.
The direct catalyst for the explosive move was the formal expiration of the 60-day negotiation window between the United States and Iran, with neither side agreeing to an extension. According to Reuters, President Donald Trump stated on the 17th that Washington would not seek to prolong the memorandum of understanding with Tehran. Iran, for its part, maintained a hardline stance, with a senior official declaring that the country would not wait indefinitely while the US continues its maritime blockade and has decided to shift its policy "from defensive to fully offensive."
Citing CCTV News, Iran has also set a final deadline of "several weeks" for the US to fully implement the memorandum of understanding. According to EIA data, US strategic petroleum reserves have fallen to 293.4 million barrels, the lowest level since 1982. The monthly reports from three major agencies cross-confirm that a supply-demand gap persists in the third quarter, with global refined products—especially diesel—facing increasingly acute tightness.
Looking ahead, the probability of crude prices maintaining a relatively strong posture in the short term remains elevated. Both Washington and Tehran appear intent on engaging in tough brinkmanship in the strait to increase economic pressure on the other side. Iran has signaled that if diplomatic efforts fail, all entities are prepared to escalate tensions in the Strait of Hormuz and the surrounding region, leaving further risk of geopolitical instability on the table.
However, chasing the rally carries multiple risks. The Trump administration has a low tolerance for expensive oil and may roll out measures at any moment to cool the market as prices climb higher. Additionally, Gulf states are secretly shipping crude out of the strait through alternative routes, meaning actual transport volumes may exceed what the market currently knows. Against the backdrop of an ongoing blockade, any geopolitical development—however minor—will amplify oil price volatility. While the short-term bullish bias remains intact, traders must remain vigilant against the two-way risks posed by policy intervention and fluctuating geopolitical circumstances.
Source: Wind, Everbright Futures Research Institute