The 'Weekend Closure of Navigation' in the Strait of Hormuz Ignites Oil Prices! International Crude Oil Prices Surge Over 3%; Domestic Fuel Futures Soar 18%

According to Reuters, a senior Iranian official explicitly stated that U.S. recognition of Iran’s right to uranium enrichment constitutes Tehran’s 'red line'—'a right Iran will never relinquish.' However, specific details and scale of enrichment could be discussed later. The official emphasized that Washington must first meet Tehran’s prerequisite conditions before nuclear issues can even be placed on the agenda, characterizing U.S. Vice President Vance’s recent proposal as merely America’s 'ideas and demands,' not a basis for bilateral negotiations. The U.S. stance remains equally firm. According to Xinhua News Agency, Vance stated in an exclusive interview with Reuters that Iran must 'substantially' reduce its uranium enrichment capacity and take concrete actions—not just verbal commitments—to satisfy U.S. requirements. He added that the U.S. remains 'open' to reaching an agreement and revealed that Washington is currently engaged in negotiations with Iranian President Pezeshkian and Foreign Minister Araghchi on related matters. Escalating Blockade: Shipping Route Threats Become More Concrete Parallel to the diplomatic deadlock, tensions in the Strait of Hormuz have further intensified. According to CCTV reports, Naghdi, speaking to the semi-official Iranian news agency Fars News Agency, stated that the 'illegal shipping lanes' slated for closure refer to southern routes running close to Oman’s coastline. He described these 'minor channels' as having been created through rock blasting, primarily used for smuggling oil and transferring it onto tankers. Another IRGC advisor, Majid Mirahmadi, previously disclosed that approximately 10 vessels now transit the Strait of Hormuz daily—down sharply from the pre-war average of about 125 vessels per day—indicating a substantial contraction in actual maritime traffic. Preliminary data from vessel-tracking firm Kpler shows that, as of September 30, the region’s seven-day moving average of crude oil exports stood at 18.3 million barrels per day. In September, exports exceeded pre-war levels on 14 days, including ship-to-ship transfers conducted via the Strait of Hormuz, the Red Sea, and the Gulf of Oman. Analysts note that although export volumes rebounded in September, Iran’s ongoing attacks on tankers and persistent logistical constraints remain unresolved—raising serious doubts about whether such elevated export levels can be sustained. On October 7, IMF Managing Director Kristalina Georgieva issued a warning: so long as navigation through the Strait of Hormuz remains under threat, high energy prices and elevated transportation costs could persist until 2027. Domestic Market: Holiday Risk Premium Released En Masse; Energy & Chemicals Sector Explodes Geopolitical risk premiums accumulated during the National Day holiday were released en masse on October 8—the first trading day after the holiday. By the close of commodity futures trading, main contracts for methanol, para-xylene, liquefied petroleum gas (LPG), benzene, and styrene all hit their daily upper limits. Fuel oil surged over 18%; low-sulfur fuel oil (LU) and asphalt rose more than 9%; PTA and crude oil gained nearly 9%; PET bottle-grade resin and short-fiber polyester jumped over 8%; polypropylene, propylene, and polyethylene rose more than 7%.

Re-examining the Middle East’s Oil Amid a War That Has Gone Awry

The multifaceted impacts of war-induced high oil prices continue to unfold. Oil is the lifeblood of the global economy. Soaring international oil and natural gas prices are severely disrupting the world economy. Surging fuel prices have also triggered severe inflation and other livelihood challenges across numerous countries. News reports and analyses on this topic are ubiquitous—illustrating, from both macroeconomic and microeconomic perspectives, the wide-ranging shocks and consequences triggered by this war-induced spike in oil prices. (I) Global Economic Growth Will Slow and Inflation Rise in 2026 At a press conference held in Washington on March 19, 2026, IMF Spokesperson Julie Kozack stated that, based on the IMF’s empirical estimates, a 10% increase in energy prices sustained for one year would lift global inflation by 0.4 percentage points and reduce global economic output by 0.1–0.2 percentage points. If oil prices remain above USD 100 per barrel over the long term, they will exert significant pressure on global inflation and economic growth. Following the outbreak of the U.S.-Israel-Iran war, the IMF’s latest World Economic Outlook report—released on April 14, 2026—projected that, assuming the Middle East conflict subsides by mid-year, global GDP growth in 2026 would reach 3.1%, down 0.2 percentage points from the January forecast, while global inflation would rise to 4.4%, up 0.3 percentage points from 2025. Should hostilities and high oil prices persist longer, 2026 global growth would fall to 2.5%, and global inflation would climb to 5.4%. Under extreme scenarios, global growth could dip to around 2%, with inflation surging to 5.8%. On May 4, 2026, at the Milken Institute Global Conference in the United States, IMF Managing Director Kristalina Georgieva remarked that the continuation of the Middle East war means the IMF’s earlier forecasts—of global growth slowing to 3.1% and inflation rising to 4.4%—are no longer valid. The persistence of war, oil prices hovering around or above USD 100 per barrel, and mounting inflationary pressures indicate that the IMF’s downside scenario has already materialized. Should the war extend into 2027 and oil prices reach approximately USD 125 per barrel, even worse outcomes are expected—including higher inflation and a likely de-anchoring of inflation expectations. (II) The United States Is Suffering Backlash from War-Induced High Oil Prices As the world’s largest oil producer—and despite having achieved energy independence—the U.S. simultaneously exports large volumes of crude oil and refined products while also importing substantial quantities of both. Its domestic market remains highly integrated with global oil markets. As the instigator of the U.S.-Israel-Iran war, the U.S. is now directly feeling the impact of soaring international oil prices, which have pushed domestic gasoline and diesel prices to four-year highs—posing a major challenge for the Trump administration and the U.S. government. Prior to the war’s outbreak on February 28, 2026, the national average retail price for regular gasoline in the U.S. stood at USD 2.98 per gallon, and diesel at USD 3.76 per gallon.

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