The geopolitical "powder keg" in the Middle East has been ignited once again. On February 28, local time, the United States and Israel launched attacks on multiple targets inside Iran, marking another escalation in the Iran-Israel conflict.

This development immediately unsettled global capital markets. As the heart of the global energy landscape, the resurgence of conflict in the Middle East quickly drove up prices for energy assets such as oil and natural gas. ICE Brent crude surged over 3% in a single day last Friday. Concurrently, a sharp rise in market risk aversion spurred strong interest in precious metals like gold, with spot gold in dark markets briefly surpassing $5,570 per ounce.

"A series of conference calls filled the entire weekend," a senior fund manager in Shanghai described his recent hectic schedule. "Starting from Friday afternoon, as tensions mounted, there was a constant stream of analyst briefings, discussions among peers, and inquiries from clients. Questions like 'How high can Brent crude go?', 'Is it still worth chasing gold?', and 'Will risk assets be impacted?' required us to form a baseline view to navigate Monday's market." Multiple fund companies believe this conflict not only heightens the fragility of global energy supply but also introduces significant uncertainty into the trajectory of commodities and risk assets for the year.

Geopolitical tensions are amplifying the volatility of the oil and gas sector. In fact, even before this recent outbreak, market concerns about geopolitical risks had been building, with underlying movements already visible in the oil and gas sector.

Since the beginning of the year, driven by a confluence of factors including tight supply-demand balance, escalating geopolitical conflicts, and long-term underinvestment in capital expenditure, the oil and gas sector has shown sustained strength. ICE Brent crude prices have climbed steadily from $58.72 per barrel at the end of last year, recently breaking through the $73 per barrel mark, representing a year-to-date increase of over 20%. Boosted by this, the Dow Jones U.S. Oil & Gas Exploration & Production Index has risen 18.43% year-to-date, while the CSI Oil & Gas Resources Index in the A-share market has surged 33.07%. Stocks like Tongyuan Petroleum and Potential Energy saw their share prices double.

Regarding this strong performance, Guotai Fund views geopolitics as a key catalyst for the oil price increase. Tensions in the Middle East and rising shipping risks in the Strait of Hormuz have led markets to continuously price in a geopolitical risk premium, further boosting expectations for oil price appreciation and making crude oil the commodity with the most significant upward potential currently.

However, the aforementioned senior Shanghai fund manager holds a different view, suggesting that crude oil's strong performance since the precious metals liquidity event in February already implied expectations of conflict. Considering that Trump's MAGA agenda primarily focuses domestically, prolonged U.S. involvement in the conflict is likely limited. If the conflict remains contained, referencing the 2025 scenario, crude oil might experience a short-term spike towards $80 per barrel before its upward momentum gradually fades.

"Another transmission channel is shipping, particularly for oil products," a fund manager heavily invested in resource assets stated. "The Strait of Hormuz, controlled by Iran, is the world's most critical oil transit chokepoint. Any military action could lead to blocked routes or a sharp spike in shipping insurance premiums, which would directly benefit the oil tanker sector. Spot freight rates for relevant shipping companies could see a sharp, short-term surge. Conversely, industries highly dependent on crude oil costs, such as aviation and chemicals, will face significant pressure, potentially creating a 'split market' scenario."

Data from the Baltic Exchange shows that the freight rate index for Very Large Crude Carriers (VLCCs) on the key Middle East-to-China TD3C route rose nearly 26 points recently to WS163.28. The equivalent time-charter rate for this route reached $151,200 per day, a 172% increase from $55,500 per day in early January, indicating a clear shift towards a 'squeeze-driven' upward trend in market sentiment.

Taking a longer-term perspective, Guotai Fund believes the oil and gas sector offers both short-term trading opportunities and medium-term allocation value. In the short term, uncertainties from geopolitical conflicts, the continuity of OPEC+ production cuts, and fluctuations in crude inventories will continue to provide catalysts, ensuring ample price volatility in the sector. From a medium-term view, with the oil price center steadily rising, the profit stability and cash flow adequacy of domestic state-owned oil majors are continuously improving. Coupled with their high dividend advantages, they present strong allocation appeal during a period of declining interest rates. Long-term, the energy transition is a gradual process; traditional energy remains the core support of the global energy system, with oil and gas demand having a solid long-term floor. The industry will not decline rapidly, and leading companies, leveraging resource advantages, cost efficiency, and global布局, can continue to generate stable returns, making them suitable as part of a long-term asset allocation strategy.

Beyond crude oil, the safe-haven asset gold is also regaining its upward trend after significant fluctuations. Following the severe Middle East situation last Friday, February 27, COMEX gold rose nearly 2%, approaching the $5,300 per ounce level.

Huaan Fund attributes this to two factors: the ongoing Middle East tensions significantly elevating geopolitical risk, driving safe-haven flows into gold; and a recent ruling against U.S.-imposed "reciprocal tariffs," which, if abolished, would reduce U.S. government revenue sources, exacerbating concerns about its debt burden while simultaneously easing domestic inflationary pressures, potentially creating room for Fed rate cuts. Both aspects could be favorable for gold.

"This escalation of geopolitical conflict is the direct trigger for the short-term rise in gold prices," the resource-focused fund manager mentioned earlier stated. "The sharp increase in geopolitical risk has validated gold's role as a traditional safe-haven asset, attracting substantial capital seeking safety. However, we believe this gold rally cannot be simply attributed to safe-haven demand alone."

He further analyzed that the core driver lies in how extreme events like war amplify concerns about long-term structural issues. "For instance, the multi-year gold-buying spree by global central banks is underpinned by the broader narrative of 'de-dollarization' and reserve asset diversification. Similarly, the U.S.'s high fiscal deficits and debt ceiling issues essentially represent a透支 of the long-term credibility of sovereign fiat currencies. Geopolitical conflict acts as a reminder, prompting investors to re-evaluate gold's unique value in hedging macro uncertainties and credit risks. Therefore, even if short-term conflicts ease, these long-term logics will continue to support gold's strategic allocation value."

From a medium- to long-term perspective, Huaan Fund believes the macro-structural factors supporting gold have not fundamentally reversed. These include sustained gold purchasing demand from global central banks amid de-dollarization, pressure on the long-term credibility of the U.S. dollar from "fiscal dominance" policies, and systemic risks arising from a fragmenting global geopolitical landscape. Gold's value in hedging against "international order collapse risk" and "sovereign currency risk" is becoming increasingly prominent.

"Looking ahead, after a period of volatile adjustment, gold prices are showing signs of stabilization, with volatility also declining significantly, indicating that its allocation value is gradually emerging. We recommend participating in gold investment with a steady, broad asset allocation philosophy," Huaan Fund stated.

Behind the rally in resource prices, the negative impacts of geopolitical conflict are also triggering deeper market concerns.

Yang Delong, Chief Economist at Qianhai Kaiyuan Fund, stated that Iran, as a major global oil producer, coming under attack could disrupt the supply-demand balance in the international crude market, leading to a sharp rise in oil prices. Higher oil prices would directly increase production costs for industries like chemicals that use oil as a raw material. Simultaneously, industries with high petroleum consumption would see profit margins compressed due to rising costs. The international aviation industry would also be significantly affected. With Israel already closing its airspace and Iran potentially following suit, further blows to international aviation are likely.

Compared to the direct impact on specific industries, some market participants are more concerned about the macro spillover effects of rising oil prices.

"The impact of geopolitical conflict on oil prices is direct, but investors need to be more wary of its secondary effect: the potential resurgence of inflation," another public fund manager in Shanghai cautioned. "Energy is the mother of inflation. Sustained high oil prices will directly push up the global inflation baseline, which could disrupt the interest rate cut plans of major central banks like the Fed. If rate cut expectations are broken or delayed, it could significantly pressure the valuations of global risk assets."

A Fund of Funds (FOF) manager analyzed from an asset allocation perspective: "For 2026, close attention must be paid to the upside risks in global energy prices. If energy prices experience sustained, significant increases, the impact of global re-inflation on overseas interest rates could trigger new changes in global asset pricing. Based on our assessment of the current and 2026 economic and market environment, we have gradually increased allocations to assets related to domestic demand and leading cyclical companies, enhancing the balance of our portfolio."