Recent reports of the US and Iran nearing a one-page memorandum of understanding caused WTI crude to drop to $94 per barrel, as markets quickly priced in the agreement's finalization, the strait's reopening, falling oil prices, and a rebound in risk assets. The flaw in this pricing is its assumption that a "deal" equates to a "return to the status quo." The memorandum's essence is the US lifting its maritime blockade in exchange for Iran reopening commercial shipping, but control of the Strait of Hormuz remains with Iran. On April 23, the first transit fee was deposited into Iran's central bank; on May 5, the "Persian Gulf Strait Authority" was officially established. History provides the answer for such phased agreements. For instance, the first phase of the Gaza ceasefire took effect in October 2025, while the second phase remains contentious. The US-Iran framework is similar: second-phase issues like the nuclear program, uranium enrichment caps, and sanction removals are each Iranian red lines. The "30-day negotiation period" essentially defers rather than resolves these issues. Concurrently, anticipation of a Trump visit to China fuels bullish sentiment in equity markets. Against this backdrop, the structural changes in Hormuz have become an under-priced variable. This report seeks to answer which commodities' supply dynamics have been reshaped by this conflict and how it will rewrite the global economic order and asset pricing.
The era of free passage is over; the "institutionalization of tolls" in the Strait of Hormuz is now a reality. For decades, "blockading Hormuz" was Iran's ultimate threat against the West. In the 2026 conflict, Iran made a more astute choice, establishing a multi-tiered fee system to transform control of the strait into a sustainable "political-economic asset." Iran's parliament passed a bill on March 30 to levy transit fees on vessels. The first fee, approximately $2 million, was settled in non-US dollar currencies and deposited into Iran's central bank on April 23. The official launch of the Persian Gulf Strait Authority on May 5 unified registration, declaration, and payment requirements for all passing vessels, with fees fluctuating based on ship type, cargo, and "other prevailing conditions." This change's differential impact on the global economy is that a full blockade would pit Iran against all oil-consuming nations and be unsustainable for Iran itself, while "toll collection" retains the core deterrent of a blockade under the commercial guise of "providing a service." Furthermore, involving Oman in "joint management" transforms a unilateral occupation into a bilateral mechanism. Oman's tradition of neutrality significantly reduces political resistance to this arrangement and fractures any unified counter-position the Gulf Cooperation Council might form.
On May 4, Trump initiated a "Freedom Plan," deploying destroyers, over a hundred sorties, and 15,000 active-duty personnel in an attempt to forcibly clear the strait, only to announce a suspension the next day. Military pressure failed to open Hormuz and instead became the most potent footnote in Iran's narrative of "repelling the US." The right of passage through Hormuz is no longer a problem solvable through unilateral military pressure. This signifies that even if a final agreement is reached, Hormuz will not revert to its pre-war state. First, Iran's core demands are far from being met. Under the memorandum framework, disagreements over the suspension period for uranium enrichment remain between 12 and 20 years, sanctions removal is "gradual" not immediate, and compensation and nuclear rights are conditions the US cannot accept in the short term. The essence of the second-phase negotiations is deferral; Iran will not voluntarily surrender its most effective bargaining chip before its demands are met. Second, the physical repair of Qatar's Ras Laffan Industrial City will take years. This is the world's largest LNG export base and a core hub for global helium supply. Even with a ceasefire, production capacity recovery cannot synchronize with the reopening of the shipping lane. Third, if the conflict is framed domestically as "Iran repelling the US," hardliners' political prestige will be significantly elevated, leading to increased support for Shia forces in neighboring Bahrain, Iraq, Lebanon, and Yemen. Consequently, the Middle East will not enter a more stable new order but a new structure of persistent turbulence: strait passage obstructions, resurgent sectarian politics, collectively pushing up energy risk premiums and making a systemic decline in the oil price center difficult.
Based on these factors, a definitive conclusion can be drawn: Hormuz has entered a new normal of "controlled passage." Supply chain constraints, transit costs, and increased transport insurance premiums exerting upward pressure on downstream prices are persistent and certain, potentially irrespective of negotiation outcomes. This also implies that the traditional US sanctions framework against Iran will begin to hollow out. Japan, South Korea, France, and other European nations also rely heavily on shipping through the Strait of Hormuz. If these countries continue fully complying with US sanctions against Iran, cutting off technological or trade links, Iran can retaliate by increasing transit costs and adding shipping uncertainties.
As mentioned, passage through the Strait of Hormuz cannot return to the past. This impact is not confined to energy but affects the price systems of global commodities to varying degrees. Based on UN Comtrade 2024 import data (6-digit HS code) for seaborne imports, a complete breakdown of the import structures of China, Japan, South Korea, and the EU from six Middle Eastern countries (Saudi Arabia, UAE, Qatar, Kuwait, Iran, Iraq) reveals five inflation transmission chains. These cover a complete path from energy to chemical raw materials, polymer materials, metals, and even semiconductors and food security. All "Middle East dependency" rates refer to the proportion of an economy's global imports of a specific category that are sourced from these six Middle Eastern countries.
The first transmission layer is the energy chain. Crude oil is the largest category by volume, with the four economies importing a combined $288.2 billion from the Middle East six. However, dependency varies significantly: Japan (47.3%) and South Korea (35.4%) are almost entirely reliant. China's seaborne crude oil dependency on the Middle East six is 18.9%, providing substantial buffer due to overland pipelines (Russia/Central Asia corridor), source diversification, and roughly 7 months of strategic reserves; its dependency on Hormuz-shipped crude is far lower than other major Asian economies. Specifically, naphtha and light oils represent a more hidden supply dependency than crude. Japan and South Korea's dependency rates for these categories on the Middle East six are 28.1% and 25.8%, respectively. Naphtha is a core feedstock for ethylene crackers, which Japan and South Korea's petrochemical industries heavily rely on. Japan's ethylene operating rate fell below 80% in early 2026, with Mitsui Chemicals, Idemitsu Kosan, and Sumitomo Chemical initiating capacity mergers. The impact has penetrated from the energy layer to industrial manufacturing: ethylene → PE/PP → synthetic rubber/coatings/plastic parts, with raw material costs rising synchronously across downstream manufacturing. Substituting naphtha requires reconfiguring cracker units or adjusting feed structures, which is technically unfeasible in the short term.
For the EU, diesel, jet fuel, and fuel oil are energy "soft spots." The EU's dependency on the Middle East six for these is 20.4%, the highest among the four economies. In 2025, the EU imported about 1.2 million barrels of diesel per day, with approximately 44% dependency on the Middle East; jet fuel dependency was even higher at 42%. The US and India are alternative sources, but rerouting via the Cape of Good Hope adds about 3,500 nautical miles and 7-10 days transit time. The freight cost itself constitutes structural inflation, permanently elevating the transport cost system. For LNG, the four economies imported a combined $24.12 billion from the Middle East. China's dependency is 12.5% ($11.04 billion imports), South Korea's is 11.7% ($6.86 billion). Attacks on Qatar's Ras Laffan facilities led to production suspensions, with Asian LNG spot prices nearly doubling post-conflict. Long-term contracts cannot instantly switch sources, and spot replacement volumes are limited. Notably, LPG is the most underestimated category in the energy chain. China's Middle East dependency for LPG butane is 30.3%, and for LPG propane it is 14.1%. China's LPG dependency on the Middle East far exceeds South Korea's, contrary to common market perception. Propane is the sole feedstock for PDH units (propane dehydrogenation to polypropylene). The Middle East is the world's largest propane exporter; supply tightening will directly lower PDH operating rates, push up polypropylene prices, and transmit costs to downstream manufacturing like auto parts, appliance housings, and food packaging.
The second transmission layer is the inflation chain for chemical raw materials, potentially harboring significant expectation gaps and possibly the area most affected for Chinese manufacturing. Ethylene Glycol (EG) is one of the few categories showing high dependency across three economies simultaneously: China 30.5%, EU 22.9%, South Korea 22.1%. Combined imports by the four economies from the Middle East total $2.38 billion. EG is a core raw material for PET bottles, polyester fibers, and涤纶. The Middle East dominates globally due to cost advantages from its ethane cracking route. This means that if Middle East supply is disrupted, China faces not just a volume shortfall but a systematic upward shift in the price benchmark – EG capacity elsewhere is economically uncompetitive against the Middle East and can only clear at higher prices. The EU (22.9%) and South Korea (22.1%) also have significant dependencies. If all three economies face pressure simultaneously, global EG spot markets lack sufficient non-Middle East capacity to hedge. Meanwhile, for methanol, China's Middle East dependency is 25.0% ($1.996 billion), Japan's is 23.5%. Iran is the world's largest methanol exporter. Supply disruptions would directly increase feedstock procurement costs for China's MTO (methanol to olefins) units. The MTO route's economic logic is based on substituting the oil route with natural gas price advantages, a premise reliant on low-cost methanol from the Middle East. Therefore, this geopolitical shock not only creates physical supply gaps but also reshapes the chemical sector's cost curve in the short term, significantly narrowing the relative cost moat of coal/gas-based routes compared to traditional oil-based routes. This change may open a window for profitability recovery for domestic coal chemical companies.
Compared to bulk energy, some medium and small-scale chemical intermediates, due to high dependency on specific origins, have steeper and more concealed inflation transmission paths. China's Middle East dependency for ether alcohols (core raw materials for brake fluid/antifreeze) is as high as 44.7%, the highest concentration among all non-energy categories. China and the EU's Middle East dependency for styrene reach 27.5% and 19.8%, respectively. As leading producers like Saudi Arabia's SABIC substantially reduce output due to logistics disruptions, cost pressures will rapidly transmit downstream along the "styrene — ABS/synthetic rubber" chain to auto parts and consumer electronics manufacturing.
The third transmission layer involves polymer and metal materials reliant on the Middle East's low energy costs. Production capacity for these bulk materials in the Middle East is built upon extremely low energy costs (like cheap ethane and electricity) determined by geological endowment. They are characterized by an inability for short-term cross-regional substitution and the necessity to clear at very high prices. For example, China's import dependency on the Middle East for LLDPE and LDPE is 26.7% and 26.1%, respectively (combined import value ~$4.8 billion). Given the global lack of alternative capacity with equivalent costs, a 10%-15% increase in the cost of these raw materials would raise the total manufacturing cost center for China's downstream packaging, agricultural film, and wire/cable industries, ultimately reflecting in reduced price competitiveness of exported goods. POE resin, a core material for PV module encapsulation, has a Chinese import dependency of 12.2% (corresponding value $1.74 billion). While domestic production is not fully realized, import premiums from strait control, combined with rigid demand from domestic PV capacity expansion, are directly channeling the shock from traditional energy routes into the new energy产业链, creating a "new energy manufacturing cost increase" not yet priced by the market.
The fourth layer involves inflation shocks to the technology and agriculture chains. Rare gases (including helium) are the most unique category in this framework, requiring separate explanation of its shock mechanism. All four economies have Middle East dependencies above 15%: China 31.0%, South Korea 24.5%, Japan 16.2%, EU 15.2%. For other categories, inflation stems from transit control-induced transport costs and supply uncertainty premiums. The problem with helium is the physical damage to production facilities at Qatar's Ras Laffan Industrial City. As helium is a byproduct of natural gas processing, production cannot recover without facility repair, completely unrelated to whether the Hormuz passage reopens. This means that even if a comprehensive US-Iran deal is reached in the coming weeks, helium supply shortages will persist for a considerable time. Liquid helium must be stored in special high-vacuum insulated containers, each with a shelf life of only 35-48 days. Many transit helium storage tanks stranded in Middle Eastern ports have exceeded their shelf life, suffering irreversible physical boil-off losses. For instance, China imports 95% of its helium. Helium has no commercial substitute gas for cooling lithography machine lenses and semiconductor dry etching processes, nor can production line processes be altered to avoid it. Its nature is closer to the semiconductor-grade neon/photoresist supply crisis triggered by the 2022 conflict – wafer fabs face not cost premiums but capacity constraints.
The cost increases from controlled passage in the Middle East are not a one-time price shock but a permanent elevation of the baseline for the global commodity price system. However, price is merely the surface. Behind the inflation chains, this conflict is simultaneously reshaping a deeper economic order – control of passageways, the effectiveness of sanctions tools, the foundation of petrodollar settlement, and the political stance of Gulf states. The movement of these variables is the core driver determining medium- to long-term asset pricing.
It must be noted that price shocks are short-term variables; the post-conflict order reshaping is the driver of long-term pricing system changes. The establishment of the Hormuz "toll station" mechanism might be the starting point. Iranian lawmakers have stated that Hormuz transit fees "must be paid in rials," heralding the birth of an operable differential pricing system: those aligning politically with the US pay higher costs and face greater shipping insecurity; those making concessions on Iran policy gain easier passage. This mechanism weakens the effectiveness of the US sanctions framework against Iran. Economies most dependent on Hormuz – Japan, South Korea, France – if they compromise on sanctions to safeguard passage rights, will erode the multilateral support for US unilateral sanctions, transforming them from a one-way pressure tool into a two-way博弈 structure. If arrangements for settling transit fees in RMB or other non-dollar currencies materialize, the loosening of the petrodollar system will move from symbolic to institutional levels – not discussing its end, but the first appearance of a perceptible crack in its pricing center.
Following this logic, the second impacted layer is the trust structure between Gulf states and the US. Attacks on Saudi Aramco's refineries and Qatar's LNG platforms during the conflict are deeply thought-provoking events regarding the credibility of US security commitments to allies. Saudi Arabia's position in this conflict is more complex than markets anticipated. Iran's missile strikes on Riyadh led the Saudi foreign minister to declare the "thin trust" rebuilt since the 2023 diplomatic resumption completely shattered, reverting bilateral relations to a confrontational track. Concurrently, amid expectations of a Trump visit, Saudi Arabia led OPEC+ in exceeding production cuts for two consecutive months in May, clearly cooperating to lower oil prices. However, this cooperation has limits: the direct attack on Saudi Aramco's facilities has substantively damaged the credibility of US security promises. Once the vulnerability of energy infrastructure is exposed, Saudi Arabia's calculus regarding arms purchases and security outsourcing is recalculated. How long this cooperation lasts depends on the counter-offer the US can provide. Another often underestimated change is the potential weakening of Middle Eastern capital support for US tech stocks and the AI computing chain. Previously, large-scale Middle Eastern investment in US tech was largely tied to arms deals, an integrated transaction of geopolitical security and capital allocation. If arms purchases halt, tech investment will naturally become more conservative.
Meanwhile, centrifugal tendencies of Europe, Japan, and South Korea towards the US are already evident. To protect their energy interests, these economies, highly dependent on the Hormuz passage, will likely have to adopt a more pragmatic stance towards Iran, making substantive concessions on certain sanctions issues. This will loosen the US-led sanctions alliance and further weaken trust between the US and Europe/Japan/South Korea. As more countries reconsider whether "the US remains the nation capable of stabilizing global关键水道 and the dollar system's foundation," the dollar's credit itself will face structural冲击.
Focusing on the EU, it simultaneously suffers two structural impacts from this conflict: systemic anxiety in its energy import system and a trust fracture regarding US security guarantees. These combined pressures are catalyzing changes in the direction of EU manufacturing investment. The first is new energy substitution. Post-Russia-Ukraine conflict, the EU underwent accelerated energy transition driven by natural gas cutoff. Following the Hormuz shock, Europe faces Middle East dependency gaps of 44% for diesel and 42% for jet fuel atop natural gas concerns. Energy anxiety has spread from single categories to the entire import system, leaving no political room to slow the pace. The EU's long-term severe shortage of local new energy产能 means替代采购 must flow heavily to China. Procurement paths for PV modules, electrochemical storage, and wind power components post-Russia-Ukraine已验证 this; this round is larger in scale and longer in duration. The second is military spending expansion. Understanding this round's essence requires grasping its driver: not NATO target constraints, but the awakening of Europe's genuine security needs. The image of Iranian drones directly hitting Qatar's LNG platform shocked European political elites by demonstrating the extreme vulnerability of critical energy infrastructure in modern warfare and the unreliability of US protection. Under this认知, the internal logic of European military spending shifts from "meeting targets" to "self-preservation," relaxing budget constraints accordingly. According to NATO data, total defense spending for 29 European member states was $346.4 billion in 2021, projected to reach $451 billion by 2024, with a significantly elevated three-year CAGR, especially post-2023增速明显高于 pre-pandemic levels. Core countries like Germany increased their defense spending as a percentage of GDP from 1.43% in 2021 to 2.00% in 2024, marking a shift from "symbolic investment" to "rigid investment" by major European economies, gradually solidifying the institutional basis for military expansion.
From a structural perspective, funds are flowing more towards areas with tangible manufacturing attributes. The continuous increase in the share of equipment expenditure is particularly notable. For example, the UK's equipment expenditure as a percentage of defense spending rose from 22.8% in 2014 to 33.4% in 2024, reflecting accelerated weapons system updates and military modernization. This trend means the stimulating effect of defense spending on manufacturing is strengthening, forming more direct order support, especially in aerospace, defense electronics, and high-end equipment manufacturing. In absolute terms, equipment expenditure for the four major European countries (Germany, UK, France, Italy) increased from $55 billion in 2021 to $73.9 billion in 2024, a 34.5% rise; infrastructure expenditure rose from $5.8 billion to $8.4 billion, an increase over 46%. It can be inferred that ammunition replenishment is an urgent, rigid need for EU states; the importance of perfecting air and missile defense systems is rising with geopolitical volatility. Overall, Europe's increasing procurement of PV, wind power, and storage equipment reflects a high priority on energy autonomy; rising national defense spending reflects lost trust in the security outsourcing model. "De-Americanization" is an already implemented political decision.
Thus, declining US influence in the Middle East,加剧的 ally离心倾向, and erosion of the petrodollar settlement mechanism collectively constitute the medium-term logic for a structural weakening of dollar credit. The pricing重心 for gold, the renminbi, and non-ferrous metals will undergo sustained directional shifts, which, once begun, will not reverse based on single negotiation outcomes.
Against this backdrop, a more certain global trend is that countries will continue prioritizing "supply chain security" over "efficiency first." In global stock markets in recent years, besides AI-related companies, one of the best-performing segments has been firms like Rheinmetall and Mitsubishi Heavy Industries, highly correlated with military and manufacturing expansion. This indicates capital markets are already pricing in a new world prioritizing security, manufacturing, and capital expenditure.
The main current market narrative revolves around Trump's visit expectations, fueling high sentiment in A-shares and HK stocks, with continued fund inflows into tech and consumption sectors. This narrative has short-term inertia but obscures the structural pricing changes brought by the normalization of Hormuz control. The Strait of Hormuz will not return to its origin point. The global commodity price system is impacted by the elevated energy price center, and beyond price disturbances, post-war political-economic order changes are systematically weakening the foundation of dollar pricing power.
From the perspective of seaborne export structures, market discussion remains focused on the energy chain, but attention must also be paid to the impact of the chemical and polymer material chains: China's Middle East dependencies for EG (30.5%), ether alcohols (44.7%), and rare gases (31.0%) all exceed those of Japan, South Korea, and the EU, with almost no short-term substitutes for these categories. Inflation shocks for some raw materials are permeating the costs of the PV产业链 and the tech产业链 represented by semiconductors.
Therefore, regarding asset allocation: First, oil prices may experience阶段性回落伴随 agreement expectations, but as long as the Strait of Hormuz remains semi-blockaded and博弈 over passage rights, security fees, and settlement currencies between Iran and other countries continues, with the Middle East remaining turbulent, the oil price center will struggle to decline significantly. Correspondingly, global central banks' room for further easing in the second half will face stronger constraints, with inflationary pressures lingering in the background. Second, once dollar credit faces structural冲击, the most directly受益 assets are gold, the renminbi, and non-ferrous metals. Gold benefits from safe-haven demand and weaker dollar credit, the renminbi benefits from relative revaluation under a loosening dollar system, and non-ferrous metals benefit from both a weak dollar and expansion in manufacturing, military, and energy security investment. In contrast, high oil prices compress the imagination for持续宽松 monetary policy. If Middle Eastern petrodollars undergo reallocation or even withdrawal from US markets, pressure will also form on tech stock valuations. This is particularly值得警惕 for tech stocks. Current profit forecasts for some overseas-related targets already extend to 2028, embedding extremely high growth expectations. Should inflation expectations rise, financing conditions marginally tighten, or Middle Eastern capital's willingness to allocate to US tech stocks decline, such high-valuation assets will face adjustment pressure. Overseas computing expansion continues, but its slope may not match the most optimistic market assumptions.
For A-shares, structural differentiation will be more pronounced. On one hand, the bottom for value blue-chips will become clearer. Particularly成分股 related to free cash flow, dividend sectors, utilities, and leading companies with stable cash flows will have stronger bottom support against the backdrop of damaged dollar credit and potential renminbi strength. On the other hand, while the tech sector currently enjoys high sentiment and the computing expansion narrative strengthens, two variables warrant attention: First, the reallocation倾向 of Middle Eastern petrodollars is not yet reflected in asset prices; any marginal reduction in Gulf capital allocation to US tech stocks could suddenly reveal valuation pressure. Second, large IPOs like CXMT remain pending, with supply-side pressure potentially释放 at any time.
Comparatively, medium-term directions更值得重视 are those产业链 directly受益于 energy security, raw material security, military spending expansion, and manufacturing expansion. For instance, new energy, power equipment, PV, wind power, storage, and nuclear power equipment will gain clearer demand support from countries strengthening energy autonomy. Similarly, coal, coal chemicals, and related equipment will benefit as mid- and downstream manufacturing nations attempt to hedge against uncertainty in Middle Eastern petrochemical feedstocks. Taking Vietnam as an example, such mid-downstream manufacturing countries are highly dependent on petrochemical feedstocks. Once Hormuz通道 risk rises, paths like转向本土化加工, introducing Chinese coal chemical equipment, and utilizing Australian coal become more attractive. The same applies to the military and manufacturing expansion chains. Post-midterm elections, regardless of the governing party, the US will need to replenish military inventories and reserves; Europe and Japan/South Korea, with some US military resources diverted to the Middle East, will be forced to increase their own defense budgets; Gulf states will accelerate local military manufacturing capacity building. This round of expansion will ultimately translate into manufacturing capital expenditure, providing more sustained impetus for minor metals, copper and other non-ferrous metals, power equipment, construction machinery, and general equipment.
Risk提示: US-Iran negotiations超预期达成全面协议 leading to premature解除 of Hormuz管控; Saudi Arabia持续超预期增产压低油价中枢; Faster-than-expected repair progress at Qatar's Ras Laffan narrowing helium and LNG supply gaps提前; Industrial policy falling short of expectations.
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