Ongoing escalation of Middle East conflicts has triggered sharp volatility in global commodity markets. On March 3, domestic commodity futures opened with strong gains in container shipping, crude oil, fuel oil, and liquefied petroleum gas. By the morning close, the containerized freight index (Europe route), fuel oil, and crude oil all hit limit-up gains of 18%, 12%, and 12% respectively. Low-sulfur fuel oil rose over 11%, methanol surged more than 10%, LPG climbed over 8%, while polypropylene, polypropylene monthly average, ethylene glycol, and pure benzene each advanced nearly 6%. Meanwhile, precious metals reversed losses late at night as risk-off sentiment revived. Spot gold in London was quoted at $5,366 per ounce, and silver rebounded above $90 per ounce. In response to extreme market swings, three major futures exchanges jointly issued risk warnings the previous evening, citing complex and fast-changing Middle East tensions and urging market participants to strengthen risk management. CITIC Securities noted that the Strait of Hormuz handles about 30% of global crude oil and petrochemical shipments, meaning any geopolitical disturbance can quickly ripple through shipping markets, potentially causing regional supply-demand imbalances and driving freight rates higher. However, risks remain: a large-scale return of non-compliant vessels due to tight capacity, a rapid de-escalation of conflicts, weaker-than-expected transport demand, or slower adjustments in global trade patterns could all weigh on freight rates. The blockage of this key energy “artery” in the Middle East has fueled the rally in energy and shipping sectors. As U.S.-Israel tensions with Iran intensify, concerns over energy supply disruptions have soared. According to Xinhua, a commander of Iran’s Islamic Revolutionary Guard Corps warned that any vessel attempting to pass through the Strait of Hormuz would be destroyed, vowing “not a drop of oil will leave the region.” Separately, Qatar Energy announced on March 2 the suspension of LNG production at two facilities following drone attacks, sparking a rally in European gas markets. The benchmark Dutch TTF gas futures surged up to 50% intraday, a rare spike in recent years. At the March 3 opening, domestic commodity futures extended gains with multiple limit-ups. The container shipping index (Europe route) jumped over 12% at open before hitting an 18% limit-up at 1,644.8 points. Crude oil futures rose 12% for a second consecutive day, reaching 572.3 yuan per barrel. Fuel oil and LPG contracts also hit limit-ups. Led by crude, the entire energy and chemical complex rallied, with methanol, polypropylene, and pure benzene among the top gainers. A trader noted that market focus has shifted from fundamentals to an extreme “supply vacuum” scenario. Analysts at Nanhua Futures indicated that if transit through the Strait of Hormuz is blocked and Middle East oil producers cut output, global crude supply could shrink by about 10 million barrels per day in the short term, drastically altering the supply-demand balance. China Futures suggested that if shipping remains unimpeded, oil prices may see a short-lived spike of $5–15 per barrel before retreating; however, if transit is disrupted or Iran’s exports halt, Brent crude could climb steadily, with OPEC+ spare capacity and U.S. strategic reserves offering only limited cushion. Precious metals also experienced heightened volatility. Gold and silver futures and spot prices gapped up on March 2, with gold again breaching $5,400 per ounce. Later, spot silver plunged over 7%, and gold also tumbled. But as Middle East tensions escalated overnight, safe-haven flows returned. By early March 3, silver had erased losses and turned up nearly 2%, while gold recovered to above $5,379. Analysts at Guotai Junan Securities noted that rapid changes in U.S.-Iran tensions will keep precious metals highly volatile in the near term. Bosera Fund observed that while COMEX gold options and SPDR ETF volatility remain elevated at around 35%, domestic gold ETF and futures positioning enthusiasm is relatively muted, possibly due to the Lunar New Year holiday. This suggests Asian markets may still provide momentum for precious metals. Geopolitical risks increase gold’s appeal as a hedge; if oil prices stay high and reignite inflation expectations, stagflation trades could further support gold. Over the longer term, sustained geopolitical risks and de-dollarization trends underpin gold’s upward trajectory. Yide Futures added that even if prices pull back temporarily, they are unlikely to decline significantly until tensions ease. However, the uniqueness of the current conflict means its impact on precious metals may not follow historical patterns. As market sentiment overheated, regulators stepped in. On the evening of March 2, the Shanghai Futures Exchange (including INE), Zhengzhou Commodity Exchange, and Dalian Commodity Exchange issued notices urging members to enhance investor education, risk management, and rational trading. Industry experts believe commodity volatility, especially in energy, will remain high amid geopolitical drivers. China Futures cautioned investors to beware of corrections after emotional rallies, noting that ample domestic inventories for products like methanol may cap price upside. Market attention will remain fixed on actual transit conditions in the Strait of Hormuz as the situation evolves.
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