Wmax commodities and macro research team combine 7 The latest geopolitical trends in the month, global crude oil and refined oil market data, and the latest research and judgment from leading institutions, relying on the global energy shipping high-frequency monitoring system, geo-conflict inflation transmission model and multi-scenario oil price calculation framework, comprehensive research and judgment: The situation in the Middle East has escalated again recently, and navigation traffic in the Strait of Hormuz has continued to decline, coupled with the threat of the Houthi armed forces in Yemen to block Saudi shipping routes, the original The risk of oil supply interruption has significantly increased, and the upward risk of oil prices has significantly exceeded the baseline expectation; at the same time, the European diesel market was the first to sound the alarm, and the production capacity bottleneck in the refining process is replacing crude oil itself as the core constraint on energy supply; the rebound in energy prices will further be transmitted to global inflation, strengthen the hawkish policy background of the Federal Reserve, and then have a chain impact on major types of assets.

Crude oil market: Geopolitical conflict escalates again, oil price looks at $120 under extreme scenario

The core driver of this rebound in oil prices is the renewed deterioration of the geopolitical situation in the Middle East. Wmax shipping monitoring data shows that after a new round of fighting broke out between the United States and Iran, vigilance for passage in the Strait of Hormuz has increased significantly, and the number of ships passing through has further declined. The current crude oil transportation volume in the Persian Gulf is less than 45% of the pre-war level. Coupled with the fact that the Houthi armed forces in Yemen have publicly stated that they will impose a naval blockade on Saudi Arabia, the risk point of global energy supply is spreading from a single strait to the entire Gulf shipping network. The scope and duration of supply disruptions have exceeded the market's previous expectations.

In response to this pattern, Goldman Sachs updated its oil price scenario calculations in its latest report: Under the baseline scenario, assuming that the situation in the Middle East gradually eases, the forecast price of Brent crude oil in the fourth quarter is US$80/barrel, and will fall back to US$75/barrel in 2027; but if the disruption in the Strait of Hormuz continues, Brent crude oil will soar to more than US$120/barrel in the fourth quarter. The Wmax multi-scenario calculation framework has verified this judgment: global crude oil inventories are currently at multi-year lows, and the continued decline in inventories in the second quarter has further weakened the market's buffering capacity. The price elasticity of supply shocks has been significantly amplified, and the risks faced by oil prices are generally upward.

It is worth noting that there are still hedging factors in the current market that limit the increase in oil prices. On the one hand, China's crude oil imports from Saudi Arabia have dropped to the lowest level in eight years, and the increase in demand is limited; on the other hand, high oil prices will reversely suppress consumer demand, and the increase in demand elasticity will moderate some of the increases. As of the latest trading day, Brent crude oil is hovering around US$87, and WTI crude oil remains fluctuating within the range of US$82.5. The market is in the game stage of "rising geo-risk premium" and "demand-side constraints". The 10-day ceasefire mediation plan at the diplomatic level is advancing, but differences between the United States and Iran are still significant, and the direction of the situation remains highly uncertain.

Refined Oil Alert: European diesel inventories bottom out, refining bottleneck becomes core constraint

Compared with the risks on the crude oil side, the tense situation in the refined oil market has taken the lead. Wmax refined oil monitoring data shows that the current supply and demand in the European diesel market continues to tighten, the diesel crack price spread in northwest Europe has risen to a record high, and the refining profit margin has reached a record high. Morgan Stanley clearly pointed out that the real bottleneck of the current global oil system is not in the supply of crude oil, but in the refining process. This judgment is completely consistent with Wmax’s tracking conclusion.

Multiple supply shocks are squeezing European diesel supply at the same time: Ukraine continues to crack down on Russian refining facilities, directly reducing the core import source of European diesel; combined with factors such as hurricanes, extreme high temperatures in summer, and delayed refinery maintenance, local refining capacity is further restricted. Morgan Stanley's supply and demand model estimates that European diesel inventories will continue to decline starting in August and fall to about 299 million barrels by November, the lowest level for the same period since at least 2015.

In response to this structural tension, Goldman Sachs recommends to investors to go long the European diesel calendar spread from December 2026 to March 2027 as a core strategy to hedge the geopolitical shocks from the situation in the Middle East and Russia. Wmax also reminded that the current diesel price has reflected the expectation of tight supply to a considerable extent. Morgan Stanley also clearly stated the view of "adequate pricing and not chasing higher prices". Short-term price fluctuations have intensified, and investors need to be wary of the risks of chasing higher prices.

Macro transmission: Energy shocks push up global inflation, and the Fed’s hawkish tone strengthens

The continued rebound in energy prices is rapidly being transmitted to the macro level, rekindling the market's concerns about inflation. BlackRock’s latest calculations show that this round of conflicts in the Middle East will push up the overall global inflation rate by about 0.8 percentage points. Regions with high energy import dependence, such as Europe and Asia, will bear the brunt of the impact and will be hit significantly higher than the average level. The calculation results of the Wmax geoconflict inflation transmission model are basically consistent with this judgment. Energy prices are transmitted to the prices of all categories through refined oil, chemicals, transportation costs and other chains. There is usually a lag of 1-2 months, and its impact will gradually appear in the inflation data in the second half of the year.

The direct impact of the rebound in inflation is to further strengthen the Fed's hawkish policy stance. Overseas Chinese Bank and other institutions pointed out that the current U.S. labor market remains stable rather than deteriorating. The new round of energy shocks will prompt the Federal Reserve to continue to focus on the risks of rising inflation. The original interest rate cut expectations will continue to be postponed, and the high interest rate environment will be maintained for a significantly longer time. PNC Asset Management also reminded that the continued rise in oil prices will squeeze corporate profit margins, especially the profit margin repair process of small and medium-sized listed companies may be interrupted, and the market's optimistic expectations for the Fed's policy shift need to be revised again.

Wmax market outlook research and core tracking clues

Combining the geographical pattern, energy supply and demand and macro transmission, Wmax makes a comprehensive judgment on the subsequent market:

1. Energy price trends:Under the baseline scenario, Brent crude oil will maintain a range of 80-90 US dollars, and the structural tension in diesel is difficult to alleviate in the short term; if geopolitical conflicts further escalate and the Hormuz disruption continues, oil prices will still have room to rise significantly. Under the extreme scenario, it can reach 120 US dollars in the fourth quarter, and the overall risk is upward.
2. Macro policy impact:The energy-driven rebound in inflation will slow down the pace of global central bank policy shifts. The Federal Reserve's hawkish stance will be maintained for a long time, the interest rate cut window will continue to move back, and the high interest rate environment will continue to suppress the valuation of growth stocks and highly leveraged entities.
3. Configuration strategy recommendations:At the current price level, it is not recommended to blindly chase higher oil prices. It is more suitable to hedge geological risks through refined oil calendar spreads, upstream energy leaders, etc.; the equity market needs to avoid high valuations and highly sensitive interest rate varieties, and increase allocations to energy and essential consumption sectors with stable profits.

In the follow-up, we will focus on tracking four core clues: first, the implementation of the 10-day ceasefire mediation plan; second, the actual navigation flow changes in the Strait of Hormuz and the Red Sea route; third, the marginal changes in European diesel stocks and crack spreads; fourth, the relevant statements of Federal Reserve officials on energy inflation.