Oil prices surge and then fall! Fierce confrontation between the "Khark Island bombing" and the "Hormuz navigation signal"

Middle Eastern tensions, Hormuz shipping, and military developments are intertwining, continuously disturbing the crude oil market. Early Monday morning, both the crude oil market and US stock futures rose, with Brent crude briefly crossing $106, and WTI crude jumping above $101. However, as trading progressed, oil prices fell back and turned negative, while US stock futures extended their gains. This trend temporarily broke the perfect inverse correlation between crude oil and the stock market seen recently. Meanwhile, US Treasury futures remained stable and the dollar edged lower. Current market data shows traders are weighing two major disruptive factors: On one hand, concerns over the US military strike on Iran’s Khark Island oil export hub; on the other hand, signs of local easing of congestion in the Strait of Hormuz. Khark Island Attacked: A Critical Node in Global Oil Market At present, market focus remains on supply shocks from the Middle East. According to CCTV News, on Friday evening Eastern Time, US President Trump posted on social media, stating that the US military has launched a “fierce airstrike” on military targets at Iran’s oil export hub, Khark Island. Khark Island handles 90% of Iran’s oil exports — 9 out of every 10 barrels exported are loaded here. The island has a deep-water port and large storage facilities, able to accommodate supertankers, with a maximum loading capacity of about 7 million barrels per day. The US's direct military strike on the island has heightened the risk to the global oil supply chain. Market analysis indicates this incident exacerbates global oil supply chain risks, making the blockade of Hormuz shipping largely persistent. Signs of Partial Recovery in Hormuz Shipping Compared to the Khark Island incident, there are some easing signals in shipping. CCTV reporters learned on March 14 that two Indian-flagged LPG carriers belonging to Indian shipping companies have recently successfully crossed the Strait of Hormuz, currently heading for India and expected to arrive at relevant Indian ports in a few days. Additionally, Bloomberg tanker tracking data shows that in the past 24 hours, several Iranian-related vessels (including a VLCC, an LPG vessel, and several bulk carriers) have also left the Gulf, and a container ship has entered the Persian Gulf. Indian Foreign Minister S Jaishankar commented: “I am currently in dialogue with them (Iran), and my dialogue has yielded some results. If it works for me, I will naturally continue this approach.” S Jaishankar emphasized that reasoning and coordination provide better solutions than inaction. However, he clarified that this is not a quid pro quo, nor has a comprehensive passage agreement been reached. He stated clearly: “Each vessel passage is a separate case.” Currently, more than 20 Indian-flagged merchant ships are still anchored in the strait waiting for passage. Furthermore, perhaps the best news is: For three consecutive days, there have been no notable ship incidents in the Gulf region. The UK Maritime Trade Operations (UKMTO) office’s latest attack notification remains dated March 12. CNBC reporter Brian Sullivan gave a direct assessment: “The strait is still very calm… Will the situation change in the next 24 hours?” US Military Plans Escort, Morgan Stanley Confirms Plunging Shipping Volume Facing global supply chain disruptions and rising oil and gas prices due to the blocked strait, the Pentagon is taking action. US media disclosed Secretary of Defense Hagseth has approved deploying an amphibious ready group of several warships and 5,000 Marines. The USS Tripoli, stationed in Japan, is heading to the Middle East. US officials revealed the Pentagon is considering sending more destroyers to escort tankers trying to transit the strait. But this is not immediately effective. Officials emphasized that even if reinforcements arrive, the US military will not start escort missions until the Iranian threat subsides—a process that could take a month or even longer. Nonetheless, Hormuz shipping conditions remain dire. Morgan Stanley estimates, based on vessel data: - Before the conflict: About 25 oil and LNG tankers per day transited the Strait of Hormuz - Past 11 days: Actual traffic only about 0-2 ships/day Morgan Stanley sharply lowered passage estimates in its latest daily monitoring report. The firm notes increased AIS interruptions and spoofing, raising data noise. Upon rechecking, daily average traffic through the Strait of Hormuz in the past 11 days was only 0-2 ships—far below previous estimates of 2-6 ships. “Whether flow dropped about 85% or about 95%, the conclusion is the same: Transport through the Strait of Hormuz remains severely restricted, meaning the global oil market faces a significant supply shock,” Morgan Stanley stressed in its report. Goldman Sachs: US Stock Risks Include More Than Just Middle East Tensions Amid the coexistence of high oil prices and rebounding US stocks, Goldman Sachs analyst Brian Garrett notes that the S&P index is only about 5% below its all-time high. Garrett emphasized two key facts to investors: “First, this conflict’s de-escalation mechanism is not a unilateral decision; second, besides Middle East tensions, the risk matrix also includes credit and employment macro factors.” Based on this, Garrett believes shorting Delta positions is currently the best way to manage long exposure. He clearly points out the market’s upside is basically limited near all-time highs (about 7,000 points), while downside risk is unlimited. Risk Warning and Disclaimer The market involves risk, investment requires caution. This article does not constitute personal investment advice and has not taken into account individual users’ particular investment objectives, financial circumstances, or needs. Users should consider whether any opinions, views, or conclusions in this article suit their own circumstances. Investors are responsible for their own decisions.