Economics expert Wan Zhe: Based on the current situation in the Middle East, the scale of supply shocks may exceed previous levels.

Professor Wan Zhe, an economics expert at Beijing Normal University, said that historically, the duration and magnitude of oil price increases triggered by conflicts in the Middle East depend on the development of geopolitical situations. Given the current situation, the scale of the supply shock may exceed previous levels. The supply gap caused by the closure of the Strait of Hormuz may account for 15% to 20% of global supply. Furthermore, the geopolitical uncertainty is higher, the risk of conflict spillover is escalating, and there is even a risk of the conflict spreading to a comprehensive conflict in the Middle East. Market panic is stronger than in historical local wars. As for future oil prices, if the conflict maintains its current intensity, the closure of the Strait of Hormuz continues, the Houthi armed forces continue to disrupt but do not completely block the Bab el Mandeb Strait, and there are no major diplomatic breakthroughs, prices should remain above $100. If the Bab el Mandeb Strait is blocked, with both major chokepoints simultaneously interrupted and the conflict spreading to more countries, prices will continue to rise. If there is a significant diplomatic breakthrough and the Strait of Hormuz is reopened, oil prices may quickly fall below $100.