On July 27, signals emerged over the weekend indicating easing geopolitical tensions in the Middle East. Market risk aversion faded quickly, and international oil prices, which had surged due to pressure on energy transport channels, plunged. Both New York and Brent crude fell sharply during trading sessions and closed with significant losses. Meanwhile, irrational speculation in domestic onshore oil QDII-LOF funds subsided synchronously, with several mainstream products hitting limit-downs at close. However, overall premium levels remain high, and speculation risks remain severe.
Late last month, Brent crude prices strongly breached the $100 per barrel mark, with WTI crude rising in tandem, showing a volatile trend of sharp surges and plunges. The core driver of this rapid oil price increase was the spread of Middle East energy transport risks from the Strait of Hormuz towards the Red Sea. The escalation of US-Iran conflicts and the announcement of a maritime embargo by Yemen's Houthi armed forces meant that the world's two major energy chokepoints faced substantive blockade threats simultaneously for the first time, fueling extreme market speculation.
Violent oil price fluctuations triggered irrational speculation in onshore oil funds, with premium rates in the secondary market for some products briefly exceeding 30%. Monthly gains in onshore prices far exceeded those of external oil prices during the same period. Financial experts point out that foreign exchange quotas for current oil-related QDII funds are basically exhausted, and primary market subscription channels are nearly stalled. This prevents cooling speculation heat through new share supply. With limited existing shares on the market, a large amount of speculative capital crowded in, directly pushing trading prices away from real net asset values (NAV). Normally, significant premiums would attract arbitrage capital to capture price differences, but foreign exchange quota controls directly broke the normal arbitrage balance and cut off operational channels. Coupled with time lags in subscription and redemption businesses, this further amplified the divergence between price and NAV.
A review of market trends in recent years shows that oil price surge episodes driven by geopolitical conflicts are often accompanied by short-term speculation on oil funds. All high premium situations ultimately end with rapid premium convergence and significant pullbacks in onshore prices. Since July, multiple fund companies have issued numerous risk warnings and densely adopted temporary suspension measures, but it remains difficult to eliminate premiums in the short term. As oil prices plunged, related products hit limit-downs, and premium rates fell slightly, but high-level risks remain severe.
Looking ahead, macro analysis indicates that three conditions supporting previously restrained oil prices—inventory buffers, effective expectation management, and alternative supply release—are weakening simultaneously. If strait passage remains restricted, coupled with rising shipping risks, the fragility of global crude oil market supply and demand obviously increases. Institutional scenario analysis reflects high uncertainty in current oil price forecasts, with huge oil price interval fluctuations under different supply recovery and demand loss assumptions. Industry analysis believes the core issue facing the current crude oil market has shifted from production to transportation. However, with high oil prices suppressing consumption, oil-producing countries gradually increasing production, and trade flows readjusting, supply and demand relationships do not support a continuous unilateral rise in oil prices from a medium-term perspective. Oil prices have not entered a long-term bull cycle.
