The Strait of Hormuz is blocked! Are the five major assets going crazy?

On Tuesday (March 3), Middle East geopolitical tensions escalated. Due to the blockade of the Strait of Hormuz, A-shares in oil and gas, shipping, coal, methanol, and other sectors performed strongly. JinNiu Chemical hit the limit-up six times in 12 days, and the “Three Oil Giants” jointly hit the daily limit again. Multiple stocks such as China Merchants Energy Shipping, Intercontinental Oil & Gas, and Dayou Energy also reached the daily limit.

According to CCTV News, late on March 2 local time, a consultant to the Iranian Islamic Revolutionary Guard Corps stated that the Strait of Hormuz has been closed, and Iran will target all ships attempting to pass through the strait. Currently, the Iranian Islamic Revolutionary Guard Corps has not issued an official statement.

Comprehensive institutional views suggest that the blockade of the Strait of Hormuz will impact the prices of five major asset classes: crude oil, natural gas, shipping, coal, and methanol.

Regarding crude oil, on Tuesday, Brent crude oil prices rose above $80 per barrel. Francisco Blanch, a commodities strategist at Bank of America, said that Iran’s tough stance could cause Brent prices to surge above $100 per barrel. If the conflict lasts more than three weeks, the oil storage capacity of Gulf countries could be exhausted, potentially pushing Brent crude to $120 per barrel. Based on this estimate, the price increase range could be 25%-50%.

The second is natural gas. Goldman Sachs analysts pointed out in a March 1 report that current benchmark prices in Europe and Asia have almost not factored in the risk premium related to Iran. About 20% of the world’s liquefied natural gas (LNG) is transported through the Strait of Hormuz. A month-long shutdown could cause spot LNG prices in Europe and Asia to soar by 130%, reaching $25 per million British thermal units.

The third is shipping prices. According to Cailian Press, due to the Middle East conflict, the Baltic Exchange reported that tanker freight rates have surged to record levels, with benchmark oil tanker daily earnings reaching $424,000 per day. StealthGas, a U.S.-listed company, CEO Harry Vafias, predicted that VLCC (Very Large Crude Carrier) daily rental rates could reach $500,000. Compared to previous rates around $200,000 per day, this represents an increase of 100%-150%.

CICC’s research report pointed out that in the short term, increased navigation risks in the Persian Gulf region have led some ships to change course, with geopolitical risk premiums and insurance costs rising. Meanwhile, oil-importing countries, worried about supply disruptions, may increase procurement from other sources (OPEC or resuming increased production), which is favorable for crude oil freight rates.

The fourth is methanol. Huatai Securities’ research shows that by 2025, the volume of methanol exported through the Strait of Hormuz accounts for as much as 32% of the global share. During the Iran-Israel conflict in June 2025, Iran reduced related chemical raw material supplies for two weeks. This incident caused Chinese methanol port prices to rise above 2,700 yuan/ton, with an estimated increase of over 13%.

The fifth is coal. China Energy Net’s view is that crude oil and coal, as two major basic energy sources, have significant substitution relationships in the chemical industry. When oil prices rise sharply due to conflicts, the economic advantage of coal chemical routes becomes apparent. According to forecasts from CITIC Securities and other institutions, domestic thermal coal prices are expected to rise from the current 690–700 yuan/ton to 750–800 yuan/ton or higher.

(Source: Oriental Wealth Research Center)