Crude oil prices have recently broken higher again, primarily driven by renewed small-scale military actions between the US and Iran at the end of August. Although the commodity attributes of the oil market are currently weighing on prices, ongoing disturbances in the Middle East geopolitical situation have reignited market concerns over supply disruptions, pushing prices up in the short term. This underscores that geopolitical attributes remain the absolute core factor influencing oil prices.

In terms of political attributes, on one hand, after the US Treasury Department announced economic sanctions on Iran that fell short of expectations last week, the market saw increased hopes for a de-escalation in US-Iran tensions. Additionally, the US government subsequently announced the redeployment of diplomats to Middle Eastern nations, which not only further signaled a easing of tensions but also led the market to anticipate that full-scale hostilities would not reignite. On the other hand, Trump reiterated last week that the US would not re-accept the temporary ceasefire agreement reached in June, while stating that all options remain on the table. Such remarks have added uncertainty to the situation, preventing the geopolitical risk premium from fully dissipating.

Furthermore, considering that Iran is currently negotiating with Oman, the two sides have issued a joint statement planning to establish a temporary shipping lane and conduct joint mine-clearing operations, potentially reaching a new strait transit mechanism within the next 60 days. This could alleviate the transport bottleneck in the Strait of Hormuz to some extent, but it may also hinder expectations of an effective agreement between the US and Iran, as it would greatly threaten the enforcement of US economic sanctions against Iran.

Notably, over the weekend, the US took the lead in attacking islands in southern Iran, claiming it observed Iran preparing to launch mine-carrying rockets toward the strait. Iran subsequently launched missile strikes on Monday and shot down a US drone. This marks the first military action between the two sides in a month, once again stoking market concerns over an escalation of US-Iran military conflict.

At present, small-scale military clashes between the two sides are unlikely to be completely extinguished in the short term, meaning the market will continue to experience volatility driven by shifts in the Middle East geopolitical landscape. However, a further escalation of their contradictions may also be difficult to fully ignite, as neither military costs nor economic pressures can support another large-scale exchange of fire between the US and Iran. This implies that even if geopolitical attributes provide support to oil prices, they may struggle to form a significant boost that drives prices back to previous highs.

Secondly, in terms of financial attributes, the US released its July price index last week, with an overall year-on-year increase of 3.7% and core PCE rising 3.3% year-on-year. These figures have further consolidated market expectations of a rate hike in September. Additionally, while the highly anticipated Jackson Hole Global Central Bank Symposium last Friday did not release clear signals of monetary policy shifts, Warsh mentioned inflation 25 times during his speech, stating that the Federal Reserve must see underlying inflation "clearly and at a sufficient pace" fall back to 2%. This rhetoric was interpreted by the market as leaning hawkish, further intensifying rate hike expectations, which will exert downward pressure on oil prices from a financial attributes perspective.

However, it is worth noting that even with rising rate hike expectations, an actual implementation may still be difficult in the short term. This suggests that the most likely rate hike meeting in the fourth quarter could occur in the final round of the year, and before that, even a stronger dollar may not create substantial pressure in the near term.

Finally, on the commodity attributes front, the most noteworthy development recently is the progress of the cooperation plan between Iran and Oman regarding joint management of the Strait of Hormuz. Based on their joint statements last week, the framework discussed includes establishing a temporary joint maritime corridor in the Strait of Hormuz and agreeing to implement a joint project to clear mines from the strait. This joint corridor may eventually become a permanent maritime route, accompanied by new management arrangements. If this cooperation plan ultimately materializes, it would significantly enhance the navigation efficiency and safety of the Strait of Hormuz. Given the unique geographic positions of Iran and Oman, their cooperation would mean that both shores of the Strait of Hormuz would be under Iranian control, meaning any passing vessels would be subject to oversight by both Iran and Oman.

Meanwhile, Goldman Sachs released a report last week indicating that total crude oil and petroleum product exports from the Strait of Hormuz region have risen to 15-16 million barrels per day. While this level cannot compare to the approximately 23 million barrels per day before the conflict, it is already far higher than the lows seen when the conflict erupted in March. The number of vessels transiting the strait has also increased, and although still below pre-March levels, it is showing signs of recovery. This indicates that from an objective perspective of commodity attributes, the strait's oil transport capacity is gradually recovering, combined with continued production increases from surrounding producer countries. This will make commodity attributes one of the drag factors on oil prices for a long period ahead.

Overall, the oil market currently remains in a phase of two-way tug-of-war between political attributes and financial/commodity attributes. Influenced by the former, the high uncertainty in the political landscape provides obvious volatility support for oil prices, leading to persistently high price volatility in the near term. Given the high uncertainty in recent statements from both the US and Iran, and the frequent small-scale conflicts that have not entirely ruled out the possibility of renewed negotiations, oil prices will remain in an ambiguous state of fluctuation until the geopolitical situation becomes clearer.

Influenced by the latter, while financial and commodity attributes continue to drag on oil prices, the gradual recovery of production increases from producer countries and the improving transit situation in the Strait of Hormuz are steadily restoring global crude supply. Meanwhile, market expectations of a Fed rate hike in the fourth quarter are also gradually rising, further suppressing oil prices. However, given the complexity of the current geopolitical situation and marginal improvements in supply-demand fundamentals, this drag effect is not yet sufficient to fully offset the upward support from the political risk premium.

Therefore, in the absence of clear geopolitical de-escalation signals or significant tightening of macro liquidity, crude oil prices are likely to maintain a wide-range fluctuation pattern in the short term. It is recommended that operations focus on short-term trading strategies rather than heavy directional bets. From a medium-to-long-term perspective, a high-intensity escalation of the US-Iran conflict is extremely unlikely. As the geopolitical risk premium gradually fades, the center of gravity of oil prices may face downward pressure. It is suggested to consider selectively establishing short positions in futures, or allocating to out-of-the-money put options to reduce capital pressure, while lightly holding out-of-the-money call options to hedge against tail risks from geopolitical escalation. This is for reference only.