Brent crude surges nearly 50% in three weeks, leading all major global asset classes

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Reporter | Lin Jianmin

Design | Zheng Jiaqing

Editor | Ye Yingcheng

Since the joint military strikes launched by the US and Israel against Iran on February 28, it has been three weeks, profoundly reshaping the global asset pricing logic.

According to Wind data, from February 28 to March 19, major global asset prices were significantly impacted by the US-Iran conflict: commodities led by crude oil surged, with Brent crude rising nearly 50%, attracting global capital attention. Meanwhile, traditional safe-haven assets like gold and silver declined by over double digits due to inflation pressures.

At the same time, stock indices in key Middle Eastern countries showed mixed performance. Israel and Saudi Arabia continued to rise, while the Dubai DFM Composite Index plunged nearly 15%, and Cairo’s CASE30 fell over 3%.

Outside the Middle East, Russia’s MOEX index rose slightly by 2.5%, but most major global stock indices declined. Japan, Germany, and France led the declines, each dropping over 9%, with the Nikkei 225 down 9.31%, Germany’s DAX down 9.67%, and France’s CAC40 down 9.01%. South Korea’s KOSPI fell over 7%, and the S&P 500 declined nearly 4%.

Notably, Chinese assets showed relative resilience during this round of shocks. Specifically, the Shanghai Composite Index fell 3.76%, and the Hang Seng Tech Index dropped 2.76%, both smaller declines compared to most European, American, and Asia-Pacific markets.

Market Focus

Will the Middle East conflict spread further to energy infrastructure?

According to CCTV News on March 18, citing Iran’s local time, the Islamic Revolutionary Guard Corps issued an emergency warning that Saudi Arabia, the UAE, and Qatar’s oil facilities are legitimate targets and will be attacked within hours, urging residents in the region to evacuate.

Meanwhile, Xinhua News Agency on March 18, citing Israeli media, reported that the Israeli Air Force attacked Iran’s major natural gas facilities in Bushehr in southern Iran and is preparing to strike other Iranian infrastructure.

Anliang Futures pointed out that these events mark a shift from focusing on the Strait of Hormuz’s security to whether the US-Iran conflict will escalate across the Middle East, and whether oil and gas resources and facilities in the region will suffer devastating strikes, potentially leading to production cuts or halts, turning supply from “blockage” into “shortage.”

Anliang Futures warned that the mutual targeting of core oil, gas, and petrochemical facilities between Iran and Israel has escalated from localized military clashes to a systemic shock to the global energy supply chain and commodity markets. As the Middle East is a key hub for global crude oil, LNG, petrochemicals, and fertilizers, damage to critical infrastructure could not only push up short-term energy prices but also profoundly impact commodities, agriculture, industrial metals, and global financial stability through cost transmission, trade restructuring, and worsening risk appetite.

Cinda Futures remains relatively optimistic. The latest research report suggests that Middle Eastern risks are easing. Specifically, key oil production facilities in the region have not been heavily damaged, with no substantial loss of oil capacity. The damaged facilities mainly include refineries and natural gas fields. Israel has paused airstrikes on Iranian energy infrastructure, temporarily alleviating geopolitical risks to oil supply, with no new supply disruptions reported. The Strait of Hormuz remains closed, but Saudi Arabia and the UAE have completed adjustments to their oil export routes, and Iraq’s northern oil pipelines have resumed operation. The US has lifted maritime sanctions on Russia and Iran’s oil, and the IEA has announced a release of 426 million barrels of strategic reserves, with clear expectations for increased supply.

Institutions expect A-shares to continue vying around 4,000 points

Regarding A-shares, Chuangyuan Futures believes that the escalation of Middle East tensions caused a sharp decline in overseas assets overnight. Although the US signaled restraint on oil prices, overall risk appetite remains low, with geopolitical risks still the main driver. On March 19, domestic A-shares also showed cautious sentiment due to geopolitical tensions and earnings season, with the market briefly falling below 4,000 points before recovering, indicating continued competition around that level.

Precious metals: Oriental Securities states that rising oil prices are fueling inflationary pressures globally, impacting precious metals amid tightening monetary policy expectations. However, after touching recent lows, some funds have begun to bottom fish. In the medium to long term, the upward momentum for gold remains intact, though short-term prices are entering a consolidation phase. Gold prices are weak in the short term, waiting for volatility to subside for better allocation opportunities, while silver underperforms gold.

Energy and chemicals: CITIC Futures believes that crude oil will continue to lead a strong oscillation in the chemical sector. Recent weekly data show that upstream chemical industry activity remains subdued, while downstream and terminal operations are gradually recovering. Supply of chemical raw materials is decreasing, and export diversion may increase due to widening price differentials domestically and internationally. Weak downstream demand still isn’t the main issue. Supply disruptions in energy continue intermittently; for example, besides reduced Middle Eastern supply, some companies announced force majeure on Thursday. The current chemical market remains more prone to rises than falls.