People cheering hope for a quick end, while those adding positions hope for a slower end.

Author: David, Deep Tide TechFlow

Original Title: Oil Prices Break $100, Who Is Harvesting This “War Dividend”?

Today, Brent crude oil broke through $110, and WTI surpassed $100.

You should know, the last time oil prices hit $100 was in March 2022 during the Russia-Ukraine war.

This time, it’s Iran. U.S.-Israel airstrikes, the killing of Qasem Soleimani, and the de facto closure of the Strait of Hormuz. One-fifth of the world’s maritime oil passes through this route, and now the daily traffic has dropped from over 100 ships to single digits.

Image source: TradingView

With oil unable to be shipped out and storage tanks full, Iraq, Kuwait, and the UAE have started shutting in wells and reducing production. Qatar’s largest liquefied natural gas export facility has halted operations.

U.S. crude oil prices have risen 35% in a week, marking the largest weekly increase since futures trading records began in 1983; Qatar’s energy minister said that if this continues, oil prices could reach $150.

For ordinary people, these numbers might still seem distant. But tonight at midnight, the domestic refined oil price adjustment window opens. Gasoline No. 92 will increase by 0.39 yuan per liter, adding about 20 yuan to a full tank. This is the fourth consecutive increase this year.

And gas stations are just the first link you feel.

Stranded ships in the Middle East, traffic jam in Zhangmutou, Dongguan

The Strait of Hormuz is blocked by 300 oil tankers, and 8,000 kilometers away in Zhangmutou, Dongguan, a line of trucks is stuck.

Oil isn’t just for gasoline. It’s the blood of the entire industrial system. Plastics, synthetic fibers, rubber, fertilizers—all are downstream products of oil.

When the strait is blocked, oil prices rise, and the transmission from the Middle East to South China only takes a few days.

According to Southern Finance, in the past week, Dongguan Zhangmutou, the largest plastic raw material distribution center in South China, has seen a surge in buying. Photos of “traffic jams at Dongguan Zhangmutou plastic trading market” are everywhere online.

This market, with an annual transaction scale of nearly 100 billion yuan, sees buyers rushing to purchase out of fear of price hikes. Large trucks queue to haul raw materials, and roads around the market are clogged. The largest plastic e-commerce platform even experienced downtime, with 90,000 square meters of public storage nearing capacity, and workers working overtime for several days to make space.

Image source: Southern Finance

Meanwhile, the plastic market’s rules have also changed: quotes are only for the day, payments upon delivery, no pre-orders. Prices change every hour.

How steep are the increases?

Polycarbonate (PC), used for phone cases and car light covers, has risen from a low of 10,000 yuan/ton last year to 14,000 yuan/ton, a 40% increase in a week; one of the world’s largest chemical companies, BASF, announced a price hike of up to 20% for plastic additives.

Upstream petrochemical companies are restricting supply and selling in limited quantities. Downstream factories are reluctant to accept these prices but fear prices will be even higher tomorrow.

The logic isn’t complicated:

When oil prices rise, chemical raw materials follow, plastic pellets follow, and ultimately, the prices of your phone cases, sneakers, and bottled water go up. From oil wells to store shelves, this chain is much shorter than most think. Gas stations are just the first link you notice, but definitely not the last.

The last time this kind of price surge happened was during the Russia-Ukraine war in 2022.

That year, oil prices also broke $100, prices rose all year, and global stock markets declined from start to finish. Many still remember gasoline at 9 yuan per liter.

Some buy fuel, others buy stocks

Tonight at midnight, the domestic refined oil price adjustment window opens. No. 92 gasoline is expected to increase by 0.39 yuan per liter, No. 95 by 0.41 yuan. Filling a 50-liter tank with No. 92 will cost about 20 yuan more. This is the fourth consecutive increase this year.

Tomorrow morning, you’ll pay more at the pump. But today, some are already counting their profits.

On March 2 and 3, China National Petroleum Corporation, China Petrochemical Corporation, and China National Offshore Oil Corporation experienced their first-ever two-day limit-up in history. Out of 48 oil and gas concept stocks, 28 hit the daily limit, and the entire sector turned red.

CNPC’s market value surpassed 2.4 trillion yuan, returning to the top of A-share market capitalization.

In fact, the three major oil companies have quietly been rising for three years. Since early 2023, CNPC has gained 210%, CNOOC 232%.

But these gains have been slow and quiet, most people didn’t notice. The generation that bought CNPC shares at 48 yuan in 2007 has held on for nearly twenty years, slowly climbing back during these three years of gradual increase.

What the war has done is to kick a slow-burning fuse—already burning for three years—straight into a powder keg.

The chemical sector is following the same script.

Funds have been flowing in since last year, with the scale of chemical ETFs expanding from 2.5 billion to 25.7 billion yuan, a tenfold increase. After the outbreak of war, the pace accelerated sharply, with net main fund inflows of 31.3 billion yuan over five trading days, and daily net subscriptions of chemical ETFs exceeding 300 million units.

Over 8 billion yuan has flowed into oil and gas ETFs this year, with many fund companies launching new oil and gas themed products.

After a year of slow buildup, the war has turned it into a rush.

Further down the supply chain, financial markets are also thinking about the same thing as the Zhangmutou plastic market. On March 3, plastic futures main contracts surged 6%, and polypropylene (PP) hit the daily limit.

Futures are rising, spot prices are also climbing, traders are stockpiling, and some investors are quietly positioning in plastic-related stocks.

Thus, some are hoarding raw materials to profit from price differences, others are trading plastic futures to profit from volatility, and some are buying chemical ETFs… Every link in this chain has participants betting on the outcome.

Those who bought into the three oil giants over the past three years may be betting on the long-term change in China’s energy structure—slowly earning, with certainty. After the outbreak of war, those rushing in are betting on something entirely different, such as the conflict not ending quickly and oil prices continuing to rise.

Panic and speculation often involve the same actions. The same barrel of oil is a cost for you but a profit for others. The difference is which end of the chain you stand on.

Refuelers want the conflict to end quickly; those adding positions want it to take longer.

New opportunities are not in the old straits

Looking back at history, every oil price crisis reshapes the distribution of interests along the industry chain.

2022 is a typical example. After oil prices broke $100, the immediate beneficiaries were upstream oil companies, just like today. But the real structural winners emerged in a field that was then little noticed:

New energy vehicles.

The rise of fuel prices at the No. 92 gas station directly increased the operating costs of fuel-powered cars, prompting many consumers to recalculate the economics of gasoline versus electric vehicles.

The penetration of new energy vehicles was already on an upward trajectory, driven by policies, technological advances, and charging infrastructure. But the high oil prices in 2022 acted as a more direct catalyst, turning skeptics into buyers.

Today’s situation is somewhat similar.

Oil prices again breaking $100 prompts capital inflows into oil and chemical sectors—an instinctive reaction. But if we extend the timeline to two or three years, what’s truly worth watching isn’t who profits from this round of oil price hikes but which alternative demands will be accelerated by this shock.

Over the past thirty years, the global manufacturing and trade system has operated based on several implicit assumptions: abundant energy supply, safe shipping routes, highly globalized supply chains…

The issues with the Strait of Hormuz may be caused by war, but the reliance on a single geographic choke point hasn’t changed. All energy-related participants are being forced to reassess their risk exposure.

Behind every recalculated account is a new business opportunity—alternative energy, alternative materials, alternative routes, localized supply chains… The idea of “not relying on oil” is itself becoming an increasingly large industry.

Will oil prices fall back? I think it’s highly likely. Iran’s own 90% of oil exports also pass through the strait; prolonged closure would cut off its own supply first.

But every sharp surge leaves behind things that don’t fall back with the price. The recalculated supply chains won’t be forgotten, and the rebuilt ones won’t be dismantled.

Rising oil prices do more than just change your fuel costs. They also alter how everyone does their calculations.