Market Overview On the first trading day after the holiday, Shanghai Crude (SC) futures opened sharply higher to play catch-up, closing the afternoon session at 493.3 yuan per barrel, a gain of 6.18%. During the night session, prices retreated from their highs. International crude oil has now posted two consecutive trading days of small, indecisive candles near peak levels, indicating a thick atmosphere of wait-and-see. Investor expectations are constantly oscillating between the prospect of U.S.-Iran negotiations and potential military strikes. The market's pattern of significant gains followed by minor pullbacks suggests greater concern about the risk of escalating geopolitical tensions. Attention is currently focused on the new round of U.S.-Iran talks scheduled for February 26th in Geneva, Switzerland. Iran has stated it is prepared to take all necessary steps to reach an agreement with the United States.
While diplomatic efforts continue, the U.S. is persistently increasing its military presence around Iran, applying pressure to force Iranian concessions. Although the Trump administration has warned that refusal to deal could lead to strikes "more severe" than those in 2025, and the military buildup seems to present a final opportunity for Iran ahead of the 26th, an interesting development emerged this week. Reports indicate the newly deployed aircraft carrier USS Ford has temporarily withdrawn from the encirclement due to malfunctioning toilets affecting 90% of the ship, requiring an urgent resolution for the crew. This incident further fuels investor skepticism about whether a businessman-like President Trump is truly resolved to initiate military action against Iran, given the immense risks U.S. involvement would entail—a point of market doubt all along. The timeline suggests the mystery of whether the U.S. will take military action against Iran, after nearly two months of speculation, may soon be resolved.
Following a substantial inventory draw in the previous reporting period, data from the American Petroleum Institute (API) released early Wednesday showed U.S. crude stocks surged again by over 10 million barrels. The instability of supply and demand data over the past month has made it difficult for investors to price accordingly, diminishing the impact of these fundamental figures, though prices did retreat slightly after the data release. The short-term focus remains on geopolitics. Ultimately, if conflict erupts between the U.S. and Iran, endangering oil transportation through the Strait of Hormuz, current market sentiment and expectations suggest it could propel oil prices toward $90 per barrel or even higher. Conversely, if Iran compromises and military risks subside, the market would rapidly下调 expectations. Given the significant uncertainty at this stage, it is advised to strengthen risk controls and participate cautiously.
Daily Market Movements 1. WTI crude futures fell $0.68, or 1.03%, to settle at $65.63 per barrel. Brent crude futures fell $0.53, or 0.75%, to settle at $70.58 per barrel. INE crude futures declined 0.9% to close at 485.5 yuan. 2. The U.S. dollar index rose 1.08% to 97.9. The USD/CNY rate on the Hong Kong Exchange fell 0.41% to 6.8685. The U.S. 10-year Treasury yield increased 0.14% to 113.34. The Dow Jones Industrial Average gained 0.76% to close at 49,174.5.
Recent Developments 1. Iranian Foreign Minister: Hopes for a Fair Agreement with the U.S. in the Shortest Possible Time On the evening of the 24th local time, Iranian Foreign Minister Araghchi stated that, building on the consensus reached in the previous round, Iran will resume negotiations with the U.S. in Geneva, determined to reach a fair and reasonable agreement as soon as possible. Iran's fundamental position is clear: it will not seek nuclear weapons under any circumstances, while the Iranian people will never give up their right to peaceful nuclear technology. He noted a historic opportunity exists to reach an unprecedented agreement addressing mutual concerns and safeguarding common interests. An agreement is within reach, but diplomacy must be prioritized. Iran has proven it will spare no effort in defending its sovereignty and will return to the negotiating table with the same courage, seeking peaceful resolution of all differences.
2. U.S. Evacuates Staff from Lebanon Amid Regional Tensions A Lebanese television station, citing unnamed sources, reported that the U.S. mission in Lebanon has precautionarily evacuated dozens of staff due to "anticipated regional developments." U.S. security officials are closely monitoring the potential for Iran to take retaliatory action against American targets overseas. Such reports further intensify market anxiety. Despite the ongoing tension, both sides still plan to resume talks in Geneva on Thursday. Iranian Foreign Minister Araghchi said there is a "significant chance" the standoff over Iran's nuclear program can be resolved diplomatically, but he also stressed Tehran would not make concessions under U.S. military pressure. The core disagreement in the current negotiations remains centered on uranium enrichment. Although the market widely expects a global supply surplus in the coming months, the risk of potential conflict in the Middle East has brought supply security concerns back into focus.
3. Global VLCC Long-Term Charter Rates Soar to Record Highs Over $92,000/Day Driven by large-scale positioning by South Korean shipowners and escalating geopolitical tensions, freight rates have been pushed to extreme highs. The locked-in cost for long-term charters of crude oil supertankers has climbed to a historical peak. Data from Clarkson Research Services, a unit of the world's largest shipbroker, shows the average daily cost for a one-year charter of a Very Large Crude Carrier (VLCC) has now exceeded $92,000, the highest level since records began in 1988. For the newest, most fuel-efficient vessels, daily rates have surpassed the $100,000 mark.