International oil prices drop more than 11%, plastic market slumps across the board

I. Overnight Crude Oil Market Dynamics

Markets believe the Israel-Iran conflict could end sooner than expected, coupled with the possibility that the G7 group may release strategic reserves, leading to a decline in international oil prices. NYMEX crude oil futures for the April contract fell $11.32 per barrel, or 11.94% month-over-month, to $83.45. ICE Brent crude futures for the May contract dropped $11.16 per barrel, or 11.28% month-over-month, to $87.80. China's INE crude oil futures for the April 2026 contract declined by 14.2 yuan to 732.4 yuan per barrel, and during the night session fell further by 90.4 yuan to 642 yuan per barrel.

Market Outlook

Rumors in the market suggest that the Middle East oil production cuts have intensified, with Saudi Arabia, the UAE, Iraq, and Kuwait collectively cutting production by up to 6.7 million barrels per day. If only looking at the impact of supply disruptions and oil transportation, oil prices will continue to surge, potentially reaching or even exceeding $100 per barrel. The key to whether the Strait can resume navigation soon lies in the cessation of hostilities between the US and Iran. Even if navigation resumes, according to the critical assessment by the third-party agency Klper, it will be a "slow process," with full recovery taking from several weeks to several months. The EIA's Short-Term Energy Outlook report, which assesses the impact of the Middle East conflict, predicts that the Brent crude oil price in 2026 will be $78.84 per barrel, up from the previous estimate of $57.69 per barrel. It is expected that the Brent crude oil price will remain above $95 per barrel for the next two months, and will then decline in the second half of the year. The EIA, considering the impact of the disrupted Middle East supply, has revised down the 2026 crude oil market surplus, but overall, it still judges that the oil market will be in a state of oversupply in the next two years. High oil prices will stimulate a global increase in crude oil production. On Monday, under pressure, Trump softened his stance, saying that the war with Iran would end soon, but not this week. Iran, on the other hand, stated that the decision to cease hostilities lies with Iran, and outlined its subsequent stance following a ceasefire. This suggests that the end of the war may not occur until next week.

The progress of the war is cooling down, but there are still uncertainties, especially considering the chaotic statements from Trump, making it difficult to make definitive judgments. U.S. media have criticized Trump's statements on Iran for being contradictory and inconsistent. Considering the past three days of extreme volatility, there is still a risk of oil prices rising again before the war ends. The market still has a high probability of further fluctuations. Although the oil price increase has slowed, volatility will remain significant. Pay attention to the timing and proceed with caution.

II. Macroeconomic Market Dynamics

1. Trump statedIt may be possible to negotiate with Iran under certain conditions.But within Iran, the Foreign Minister said.The new supreme leader will not negotiate with the US, while the Iranian vice president said they have not given up the option of resolving the issue through negotiations.

2、U.S. Defense Secretary says the U.S. will launch a "maximum intensity" strike against Iran on Tuesday.Part of the U.S. THAAD system in South Korea is being transferred to the Middle East. In addition, U.S. forces have sunk 16 Iranian mine-laying vessels near the Strait of Hormuz.

3. U.S. Envoy: Putin Denies Providing Iran with Information About U.S. Forces.

4. US media: Iran has begun laying mines in the Strait of Hormuz, with a scale of about dozens. Trump: Asked Iran to remove mines that may have been laid, otherwise it will face unprecedented military consequences.

5. U.S. media:US asks Israel not to attack Iran's energy facilities。

6. The U.S. energy secretary claimed that the U.S. military escorted oil tankers through the Strait of Hormuz, but deleted the post a few minutes later, and the White House also stated that no escort was provided.

7. Market News:Saudi Arabia, the UAE, Iraq, and Kuwait collectively cut production by up to 6.7 million barrels per day.

8、The National Internet Emergency Response Center issued a security application risk alert regarding OpenClaw.

9、China's goods trade imports and exports grew by 18.3% in the past two months.

III. Plastic Market Dynamics

International oil prices plummeted, and the plastic futures market declined across the board.

Plastic is quoted at 7601 yuan/ton, a decrease of 4.75% from the previous trading day.

PP was quoted at RMB 7,689 per ton, down 4.26% from the previous trading day.

PVC is reported at 5157 yuan/ton, a decrease of 2.22% from the previous trading day.

IV. Today's Market Forecast

PE：In the short term, the stability of energy supply is suppressing market sentiment, with some enterprises appropriately reducing production load, and short-term maintenance keeps the production capacity utilization of producers above 80%. Domestic regional supply remains stable. The end-users are reluctant to accept high-priced resources due to concerns over order losses. After the impact of macro factors weakens, the market tends to focus on fundamentals, with a balance between supply and demand. It is expected that the polyethylene price will fluctuate within a range of 100-800 yuan/ton today.

PP：International crude oil prices have declined, weakening cost support for polypropylene and leading to lower market prices. Speculative bullish sentiment has cooled. Downstream demand shows some willingness to purchase raw materials, and trading activity has improved somewhat following the price drop. However, overall market absorption capacity remains weak. Polypropylene prices are expected to decline today, with (East China raffia grade) projected at RMB 7,800–8,100 per ton.

PVC：The spot market for PVC has seen an increase in low-price transactions, with some changes in the short-term supply and demand. The expectation of tight ethylene supply has led to potential plans for ethylene-based producers to reduce their load in the future, while calcium carbide-based production has slightly increased, with costs also rising. This has pushed the bottom price of PVC higher. In the short term, the high and volatile energy prices have affected market sentiment. It is expected that before the situation reverses, the spot market price of PVC will fluctuate above the cost line, still influenced by energy price fluctuations.