Sinolink Securities Co., Ltd. released a research report stating that the crude oil market has currently shifted away from supply-demand fundamentals and is being driven by geopolitical risks. It is anticipated that high price volatility will be unavoidable over the next month. Until the U.S.-Iran situation becomes clearer, crude oil prices are in a state where they are more prone to rise than fall. If short-term crude oil prices continue to climb due to geopolitical issues, the report suggests focusing on upstream companies with oil and gas resources, as well as the offshore oil and gas services engineering sector, which benefits long-term from high industry prosperity. On the other hand, rising oil prices may fuel expectations of chemical product price increases. However, if the geopolitical risk premium recedes, cost pressures on the industry would decrease. Considering the future policy direction in China aimed at countering internal competition within industries, this is favorable for the long-term structural optimization and high-quality development of the chemical industry. The main viewpoints of Sinolink Securities are as follows: The risk of a U.S.-Iran war is rising rapidly, leading to a swift increase in the geopolitical risk premium for crude oil. Since February 18, expectations in overseas markets of a U.S. war with Iran have surged rapidly. Market concerns have entered a countdown-to-war phase, causing the geopolitical risk premium to rise sharply. The probability of a U.S. attack on Iran before March 31, as bet on the Polymarket website, increased from 38% on the 17th to 48% on the 18th, and further to 65% on the 19th. On the 19th, CBS News, citing informed sources, reported that senior U.S. national security officials had informed Trump that the military could launch a strike on Iran as early as Saturday. A February 20 report stated that Trump was weighing a preliminary, limited military strike against Iran to pressure it into a nuclear deal. On February 22, news emerged that if U.S. negotiators received a detailed nuclear proposal from Iran within the next 48 hours, they were prepared to hold a new round of talks with Iran in Geneva on the 27th. Since the 18th, Brent crude has risen from around $66 per barrel to a high of $72 per barrel, with the risk of a U.S.-Iran war being the primary driving factor. Brent crude net long positions have rebounded to a two-year high, and bullish call option bets for January have reached a record high. As of December 14, 2025, Brent net long positions remained at their lowest level since 2012 due to expectations of a surplus in 2026. However, driven by the rapidly escalating risk of a U.S.-Iran war, Brent net long positions rebounded to a two-year high by February 17, 2026. Concurrently, due to rising U.S.-Iran geopolitical tensions, the trading volume of Brent call options purchased in January 2026 hit a record high. The market has transitioned from a previous phase of U.S.-Iran strategic competition to a countdown phase preceding the potential outbreak of conflict. The U.S.-Iran situation will play a decisive role in the short-term trajectory of crude oil prices. Multiple countries have announced the evacuation of their citizens, and the U.S. has deployed naval and air forces to the Middle East, forming a dual-carrier strike group, leading to a rapid increase in war risk. Using $71 per barrel as a baseline, the current price incorporates an Iran geopolitical risk premium of approximately $10 per barrel. Sinolink Securities believes that subsequent developments regarding Iran could follow four possible scenarios: 1) U.S.-Iran diplomatic negotiations break down, and the U.S. engages in a limited military strike against Iran without causing actual supply disruptions. In this case, prices might continue to surge, challenging the 2025 highs, before subsequently pulling back. 2) A U.S.-Iran conflict exceeds market expectations and escalates into a full-scale war, causing actual supply losses and market fears of a real blockade of the Strait of Hormuz. This scenario could trigger an unexpected surge in crude oil prices, creating an extreme price spike. Subsequently, against a backdrop of collapsing demand and a shift in monetary policy, global macroeconomic sentiment could turn towards recession. 3) The U.S. and Iran remain locked in negotiations, with war risk remaining high but not erupting. In this scenario, crude oil prices are expected to remain prone to increases rather than decreases, but resistance may strengthen above $75 per barrel. Furthermore, the duration of this situation would likely be limited. 4) The U.S. and Iran reach a nuclear agreement, causing crude oil prices to shed the geopolitical risk premium. As Trump indicated he would find an answer to the Iran issue within 10 days, the U.S.-Iran situation is expected to become clear within two weeks. On another note, the midterm elections are Trump's primary political objective for 2026. A rapid rise in crude oil prices would inevitably lead to a defeat for Trump in the midterm elections. Risk warnings include rapid changes in international politics, intensification of geopolitical conflicts, shifts in crude oil supply and demand dynamics, and escalation of international political events.