1、 Overview of the market
At the close of October 16th New York time (early morning of October 17th Beijing time), international crude oil futures strengthened significantly under the stimulation of geopolitical news, and the two benchmark contracts closed up synchronously, with a significant increase in market risk appetite. In November, WTI crude oil with active trading on NYMEX rose by $3.44, or 3.51%, with a settlement price of $101.41 per barrel, regaining its position at the $100 integer level after nearly a month; ICE Brent crude oil rose $3.94, or 3.72%, in December, with a settlement price of $109.86 per barrel, hitting a nearly 5-month high.
2、 Trend analysis
（1） Positive factors: Shipping disturbance in the Strait of Hormuz, significant increase in geopolitical risk premium
The core driving force of the daily market trend comes from sudden geopolitical news in the Middle East. The Strait of Hormuz, as the throat of global crude oil shipping, undertakes about 20% of the world’s shipped crude oil. Oil producing countries along the Persian Gulf coast rely on this waterway for 90% of their crude oil exports. Once the passage is blocked, it will directly impact the balance of global crude oil supply. On that day, there was a tanker fire accident in the waters of the strait, and the market was concerned about the disruption of waterway traffic, the risk of interruption in crude oil transportation, and the risk of supply disturbance caused by investors quickly pricing. The geopolitical risk premium increased.
Combined with the ongoing escalation of the Middle East conflict, market institutions have raised the probability of conflict spread, trading parties have actively increased their long positions in crude oil, and the expected increase in shipping insurance costs has further amplified supply concerns, driving up oil prices. Combined with the support brought by the significant decline in US crude oil inventories the day before, the resonance between fundamentals and geopolitical news has pushed oil prices to break through key pressure levels.
（2） Negative factors: Policy expectations and demand side constraints limit upward momentum
Despite the significant increase in oil prices on that day, there still exists a bearish logic that suppresses the market, restricting the unlimited rise of oil prices. On the one hand, the market continues to pay attention to the adjustment of the US sanctions policy against the “shadow fleet” of oil tankers. There is an expectation in the market that the US will relax relevant sanctions. If the policy is implemented, Iran’s crude oil exports are expected to increase, supplementing global crude oil supply and suppressing oil price increases.
On the other hand, the production policy statements of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) remain a key balancing variable in the market. Currently, OPEC+maintains its production reduction framework, but the market continues to monitor whether it will adjust its production based on changes in oil prices. In addition, at the global macro level, the recovery of overseas manufacturing industry is weak, and the expected demand for refined oil products in the medium and long term is weak. Under high oil prices, there is a restraining effect on the consumer end, which constitutes a long-term constraint on oil prices.
3、 Future prospects
Analysts believe that the trading logic of the short-term crude oil market has entered a stage of geopolitical dominance, with supply and demand fundamentals taking a secondary position, sudden news, and increased price fluctuations. The current trading mainline in the market is no longer the conventional supply-demand balance sheet, but whether the Middle East conflict will affect the main oil producing areas and key shipping channels. As long as the shipping safety risks in the Strait of Hormuz persist, the risk premium of crude oil will remain high; Once the situation eases, there is a possibility of concentrated profit taking and rapid oil price correction for high-level long positions. In the short term, oil prices will enter a wide range of fluctuations influenced by news, and are likely to hover at high levels.

Short term focus on tracking four main lines: first, the progress of the shipping situation in the Strait of Hormuz, whether there are more ship attacks and restricted passage incidents; Secondly, whether the Middle East conflict has further spread to crude oil production and export facilities; Thirdly, high-frequency fundamental data such as US crude oil inventories and demand for refined oil products; Fourthly, the policy trends of the United States regarding sanctions on shadow fleets of oil tankers, as well as the latest statements from OPEC+officials.