Oil prices soar, related ETFs are booming. Some crude oil-themed funds issue premium risk warnings.

Domestic retail prices of refined oil products have undergone a new round of adjustments.

According to the National Development and Reform Commission, based on the current refined oil pricing mechanism, starting from 24:00 on February 24, domestic gasoline and diesel prices will increase by 175 yuan and 170 yuan per ton, respectively.

Xu Lei, a refined oil analyst at Zhuo Chuang Information, stated that since the current pricing cycle began, geopolitical tensions have led risk premiums to dominate international crude oil price movements, with international oil prices reaching their highest levels in nearly six months.

During the Spring Festival, influenced by the US-Iran conflict, crude oil prices surged significantly. The main contract price of Brent crude oil futures rose from $67.45 per barrel (as of 3:00 PM on February 13) to $71.61 per barrel (as of the close on February 21), an increase of 6%, with the highest price reaching $71.86 per barrel.

RuiDa Futures analyst pointed out that the impact of the US-Iran conflict on crude oil prices is mainly transmitted through three mechanisms: geopolitical risk premiums, which directly affect core oil price factors; the security of shipping through the Strait of Hormuz, a key variable influencing oil prices; and changes in Iran’s oil exports. According to historical data, during the “US-Iran conflict” in June 2025, Brent crude oil premiums caused by geopolitical risks were about $15 per barrel (rising from $60 to around $75), an increase of over 20%.

As a result, on February 24, crude oil-themed ETFs led the market. By the close, the Wanguo S&P Oil & Gas ETF, S&P Oil & Gas ETF Jiashi, and Oil & Gas ETF Yinhua all rose by more than 9.5%, while several other funds such as Bosera Oil & Gas ETF, Huatai-PineBridge Oil & Gas ETF, and Huaxia Oil & Gas ETF increased by over 6%.

Since the beginning of the year, Brent crude spot prices have continued to rise, boosting related thematic funds. The highest gains are seen in Huaxia S&P Global Oil LOF and Southern Oil LOF, with increases of 31.36% and 31.01%, respectively. Since the start of the year, ten crude oil-themed ETFs have accumulated net subscriptions of 5.667 billion yuan.

The sharp rise has also led to issues with secondary market premiums. On February 24, funds such as Southern Oil LOF, Wanguo S&P Oil & Gas ETF, Huaxia S&P Oil LOF, Jiashi Oil & Gas LOF, and S&P Oil & Gas ETF Jiashi issued premium risk warnings.

Among many crude oil-themed funds, the highest premium rate is for E Fund’s Crude Oil LOF, which closed at a premium of 21.87% on February 24.

Since the beginning of the year, the popularity of crude oil-related thematic funds has continued to grow. Similar situations where multiple funds issued secondary market premium notices appeared at the end of January. At that time, Huaxia S&P Oil LOF’s premium rate once reached 40%.

Huaxia S&P Oil Fund LOF has suspended large-scale subscriptions and large regular fixed investments since January 30, with the daily total investment limit reduced to 2 yuan; GF Petroleum LOF has adjusted the single-day subscription and transfer-in limit for investors to 10 yuan.

What is the market’s outlook on crude oil prices?

Nanhua Futures analyst Shen Weiwei told Jiemian News that in the short term, the core of crude oil pricing remains the Middle East geopolitical risk premium, and the development of the US-Iran issue continues to determine market trends.

“From a medium- to long-term perspective, fundamental issues still deserve attention. On the supply side, OPEC+ remains paused in production increases, and whether they restart in April is uncertain; on the demand side, April and May will enter the traditional maintenance season globally, which may reduce demand. Additionally, data on OECD commercial inventories and floating storage should be monitored,” Shen Weiwei said.

RuiDa Futures analyst believes that in the medium term, after March, crude oil is expected to remain volatile at high levels under supply-demand and geopolitical negotiations. The current high prices are supported not only by geopolitical risk premiums but also by fundamentals. “US crude oil inventories have unexpectedly decreased, and OPEC+’s compliance with no production increases in the first quarter has kept short-term supply tight, providing a floor for oil prices.”

However, the analyst also pointed out that international crude oil prices are unlikely to rise unilaterally but will fluctuate sharply under geopolitical news stimuli; this means that once geopolitical risks subside, oil prices may quickly revert to their “fair value.”

This view is shared by many institutions, and the market generally lacks confidence in the sustainability of oil price increases.

UBS stated that as geopolitical risk premiums and supply disruptions weaken, the crude oil market’s supply and demand balance will shift toward a looser state, and Brent crude oil prices are expected to fall back to the $60–70 per barrel range. UBS recently forecast that Brent crude oil will fall to $67 per barrel by the end of March 2027.

Goldman Sachs, citing lower-than-expected inventory increases, has raised its short-term forecast but still expects prices to decline from current levels, with Brent crude oil ending the year around $60. However, sanctions and supply shocks have pushed prices higher than previous expectations. Morgan Stanley also raised its short-term Brent oil price forecast, noting that geopolitical risk premiums may persist for some time, but prices are expected to fall back to $60 per barrel later this year.

(Article source: Jiemian News)