Crude oil surges! Geopolitical premiums + supply contraction + steady demand, the oil sector once again presents a window for investment.

Ask AI · How does geopolitical risk premium reshape the crude oil market landscape?

Geopolitical tensions fluctuate again, and international oil prices surge once more!

WTI crude oil futures settlement price is $111.54 per barrel, up 11.41%, closing above $110 per barrel for the first time since 2022. Brent crude oil futures settlement price reaches $109.03 per barrel, up 7.78%.

On the news front, on April 2 local time, U.S. President Trump announced continued strikes against Iran, targeting mainly power plants and oil field facilities.

Notably, both major crude oil futures experienced intraday volatility exceeding $10, indicating high uncertainty in market sentiment. Analysts point out that Iran, as a key global oil producer, if subjected to substantial strikes, will face severe challenges in global crude oil supply.

Currently, the oil industry may face three major catalysts.

First, revaluation of geopolitical risk premium. The Middle East accounts for one-third of global crude oil production. Escalation of Iran’s situation means that geopolitical risk premium will continue to support oil prices. Historical experience shows that whenever tensions in the Middle East rise, crude oil often moves upward independently of the stock market.

Second, strengthened supply-side contraction expectations. Under the global “energy security” strategy, major oil-producing countries generally control and limit production. The anticipated escalation of Trump’s sanctions against Iran may further tighten global crude oil supply, favoring an upward shift in the oil price center.

Third, steady demand. Global crude oil demand continues to grow, especially in emerging markets where energy demand is increasing. Tightening supply and demand dynamics provide fundamental support for oil prices.

Market analysts believe that for ordinary investors, directly participating in crude oil futures involves high thresholds and risks. Compared to that, deploying oil sector ETFs is a more prudent choice.

Oil ETF招商（159197） tracks the China Securities Oil & Gas Index, covering the entire chain including exploration and development, equipment services, refining and sales, gas transmission and distribution, achieving comprehensive allocation of the upstream and downstream oil industry chain. As of March 31, the combined weight of the “Three Big Oil” companies is 39.82%, with the top ten weights totaling 69.48%.

The China Securities Oil & Gas Index has performed excellently historically. Wind data shows that as of March 31, 2026, the index’s cumulative five-year return reached 103.60%, with an annualized Sharpe ratio of 0.8, indicating a risk-adjusted return superior to similar oil & gas indices.

Data source: Wind, as of March 31, 2026.

Risk reminder: Funds are subject to risks; investment should be cautious.