Beijing, February 28th — Israel has claimed to have launched a preemptive strike against Iran, coordinated with the United States, while Iran warns of retaliation. Over the weekend, the market re-evaluated the geopolitical risk premium. Market analysts say that the core variable of short-term volatility lies not in the scale of a single strike, but in whether the conflict spills over into energy transport routes and regional base security, thereby increasing cross-asset correlation and volatility.
Risk Assets React First: Amplified Volatility in the Crypto Market
After the news broke, digital assets such as Bitcoin plummeted, reflecting an increased liquidity sensitivity of high-risk assets to sudden events. Bloomberg reported that Bitcoin briefly fell below the $64,000 mark after the US and Israel began striking Iran. Interpreting investor behavior, funds tend to first reduce leverage during phases of rising uncertainty and then selectively replenish, resulting in a more common "sharp drop—recovery" pattern. This price path often amplifies "expectation gaps" and exacerbates passive selling during risk budget contractions.
Oil Prices Anchored by Hormuz: Supply Uncertainty Focused on Transport
Commodity pricing is more concentrated on crude oil. Institution views compiled by Reuters indicate that some traders and oil companies have already suspended some transport arrangements through the Strait of Hormuz. Analysts expect oil prices to remain highly volatile, with potential increases of 10%—25% if the strait is blocked, and even higher extreme spikes cannot be ruled out.
Previously pointed out by Reuters, the Strait of Hormuz handles about 20% of the global crude oil supply flow, and escalation of conflict directly factors the "war premium" into the curve. Within this framework, the market's focus shifts from "whether production is sufficient" to "whether transportation is continuous," with the risk premium more reflected in the re-pricing of the deliverable flow.
OPEC+ and Policy Expectations: Production Increase Discussions Offset Some Premiums
The supply side's hedging clues come from OPEC+. Reuters reported on February 25th, citing informed sources, that OPEC+ might be discussing an increase in April's output by about 137,000 barrels per day. Market analysts say that if the production increase materializes, it would marginally suppress part of the geopolitical premium, but not fully offset the impact of transportation disruption risks on near-term contracts. Structurally, it may manifest as widening time spreads and rising implied volatility.
Macroeconomic Implications: Re-Pricing Inflation Path and Risk Appetite
For macroeconomic assets, if oil prices continue to rise, they will influence inflation expectations through energy components, complicating the balance for major central banks between "slowing growth" and "sticky inflation." Market strategists believe that if the conflict presents a tug-of-war pattern, the "valuation recovery" of risk assets will rely more on profitability realization and cash flow certainty rather than purely liquidity-driven gains. Conversely, if "fighting while negotiating" occurs and reduces the probability of strait disruption, risk assets may experience marginal improvement after short-term shocks. The speed of liquidity premium replenishment depends on the subsequent event path and the stability of energy prices.
