Over the weekend, discussions largely centered on the US-Iran conflict. An online briefing was promptly organized, facilitating extensive communication with various institutions. The following key points represent a broad consensus reached during these discussions.

1. **Crude Oil: A Short-Term Spike, But Avoid Chasing the Rally** * **Short-term:** Brent crude prices have already risen 20% since the start of the year, surpassing $73 per barrel. Prices could potentially reach $77-80 upon market open on Monday. An attack on Iranian oil facilities or disruption in the Strait of Hormuz could push prices to $90-100. * **Caution:** This scenario represents a "buy the rumor, sell the news" event. Historically, oil prices have often fallen on the day a US-Iran conflict erupts, as investors take profits. Furthermore, global inventories are sufficient, and OPEC can increase production at any time to suppress prices. * **Medium to Long-term:** If the situation de-escalates, oil prices are expected to revert to an equilibrium around $65 per barrel. A supply surplus is even possible in the second half of 2026. * **Conclusion:** Oil price volatility will increase; avoid blindly chasing the rally.

2. **Tanker Shipping: The Prime Beneficiary** This sector presents the most certain opportunity: * Day rates for VLCCs (Very Large Crude Carriers) have surged to over $200,000, a nine-fold increase since June 2025 and a six-year high. * Demand is skyrocketing due to traders hoarding oil, potential OPEC production increases, and the risk of renewed Houthi blockades in the Red Sea. * New vessel deliveries are not expected until after June, leading to a tight supply-demand balance in the first half of the year and giving shipowners significant pricing power.

3. **Airlines: A Short-Term Setback** * Jet fuel constitutes 30% of airline operating costs; rising oil prices directly compress profit margins. * **Buffer:** Jet fuel prices in January-February 2026 were already down 10% year-on-year, providing some cost advantage. * Airlines possess pricing power: a 1-unit increase in ticket prices can boost profits for the three major Chinese carriers by 1-1.1 billion RMB, whereas a 1% rise in oil prices reduces profits by only 300-350 million RMB. Airlines can pass on higher costs through fare increases. * **Conclusion:** Short-term headwinds are expected, but the long-term trend depends on supply-demand dynamics improving; geopolitical impacts are secondary.

4. **Defense: Geopolitical Tensions Fuel Arms Exports** * The US-Iran conflict is expected to drive global military spending higher, with Middle Eastern nations significantly increasing equipment procurement. * This presents a window for China's defense exports to move up the value chain, with focus areas including fighter jets, UAVs, radar/missile systems, and consumable ammunition. * Upstream materials like rare earths and tungsten face supply disruptions and strengthened strategic importance, pointing to potential price increases. * **Core sectors:** Aviation equipment, UAVs, ammunition, rare earth magnetic materials.

5. **Gold: The Safest Haven** * Historically, gold prices have risen 75% of the time on the day a conflict erupts, with an average gain of 1.18%. * The death of Khamenei and risks to the Strait of Hormuz are shifting market sentiment from localized to broad-based risk aversion. * **Long-term:** The foundation for a gold bull market remains intact, supported by a weakening US dollar credit system and stagflation expectations. * A-share gold stocks currently trade at around 15 times earnings, offering a sufficient margin of safety.

6. **Petrochemicals: Selective Opportunities** * **Methanol & Urea:** Iran is the world's second-largest producer; supply gaps could drive prices higher. * **Polyolefins:** The exit of Iranian capacity supports an upward cycle for ethylene, benefiting large private refineries and coal-to-olefins producers. * **LPG:** International prices are strong relative to domestic ones. The Strait of Hormuz handles 29% of global LPG transport, supporting global price strength.

7. **Aluminum: A Potential Dark Horse** * The Middle East accounts for 9% of global aluminum capacity (~7 million tons), but its alumina self-sufficiency rate is only 30-40%, relying heavily on seaborne imports. * A blockade of the Strait of Hormuz exceeding 30-45 days could force Middle Eastern smelters to cut production due to raw material shortages. * Iran's domestic 600,000-ton capacity has already been damaged by the conflict. * The case for a tight global aluminum market in 2026-2027 is strengthening.

**Summary** This round of US-Iran conflict represents an escalation of unresolved tensions from 2025. Short-term, expect momentum opportunities in oil, gold, tanker shipping, and defense, with shipping and gold offering more sustained potential. Long-term, the larger theme is the restructuring of the global geopolitical landscape. China must navigate risks to energy security and the Belt and Road Initiative from Middle Eastern instability, while also capitalizing on the strategic window created by US engagement in the region.

**Investment Strategy:** Avoid chasing the oil rally; focus on tanker shipping and gold. In chemicals, target segments linked to Iranian capacity (methanol, urea, polyolefins). In defense, focus on export opportunities. Aluminum presents a potential positive surprise.