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Oil prices "soaring," how to respond?

On April 3rd, as tensions in Iran escalated again, international oil prices surged dramatically, with WTI crude jumping 15%, settling above $110 for the first time, and Brent crude surpassing $140, reaching a new high since 2008. How should one position themselves in the face of these high oil prices? Let’s hear from Little Wealth God.

First, let’s talk about the conflict situation.

Still maintaining the previous view, a U.S.-Iran war is highly likely to enter a ground war phase. From the current situation, unlike Venezuela or earlier Iraq, Iran’s conflict cannot be resolved solely through bombings and targeted assassinations of high-level officials. Moreover, the U.S. has already deployed significant forces in the Middle East and is unlikely to withdraw now.

The ongoing escalation of the conflict has also raised concerns about a global energy crisis. Currently, Middle Eastern oil exports rely heavily on Saudi Arabia exporting 7 million barrels per day through the Yanbu port. On the other end, due to attacks on Ukraine, Russia’s Baltic Sea oil shipping hubs—Primorsk and Ust-Luga—remain paralyzed, reducing Russia’s oil export capacity by about 1 million barrels per day, which is one-fifth of its total export capacity. This further tightens global crude oil supply. Therefore, future attention should be on whether Saudi Arabia’s “lifeline” will be targeted, which is closely related to the subsequent involvement of the Houthi armed forces.

Let’s talk about how to position in the crude oil market.

Those who follow Little Wealth God should know that a few days ago, I was very bullish when oil prices dropped to around $98, and I’ve already gained quite a bit. The next step is to lock in profits! The saying goes “monthly gains turn into losses,” and “when others are crazy, I panic.” Currently, oil prices have hit a new high since the financial crisis. In March, Japan’s import price for Arab light crude from Saudi Arabia reached $126.28 per barrel, up 84% month-over-month. High oil prices are undesirable for most countries. Unlike gold, oil cannot be continuously manipulated or inflated. Therefore, I believe oil prices are likely to peak soon. My strategy is to hold long positions in WTI crude contracts. If next week’s opening price reaches around $118–$120, I will close all positions to take profits.

Finally, let’s discuss the impact of escalating conflicts on cryptocurrencies.

The so-called “U.S.-Iran war missile targeting crypto wallets first”—escalation of conflict is definitely bearish for the crypto market. However, by today, the negative effects have been largely absorbed. Moving forward, Bitcoin’s price will still follow its own pattern of fluctuations. Currently, the overall trend is downward. My strategy is to open short positions on mainstream coins when Bitcoin is above $68,000, with a stop-loss above $69,500. Also, closely monitor whether hot coins like STO, which have recently plummeted, have a rebound opportunity.

What do you think of Little Wealth God’s views? Do they resonate with you? Feel free to leave comments and discuss!