According to a report by the CCTV News client on the 3rd (local time), U.S. President Trump stated that negotiations with Iran are progressing very smoothly, and a new round of talks may take place this weekend. Once an agreement is signed, the Strait of Hormuz is expected to reopen immediately.

The Strait of Hormuz accounts for approximately 30% of the global seaborne crude oil trade volume. Previously, expectations of a blockade had provided strong geopolitical risk premium support for crude oil prices. With U.S.-Iran negotiations currently progressing smoothly and the reopening of the Strait of Hormuz now clearly anticipated, the risk of crude oil supply disruptions has subsided significantly. Consequently, demand for risk-hedging inventory among spot market traders has declined, placing downward pressure on prices; in the futures market, the risk premium embedded in crude oil-related contracts is expected to gradually recede, subjecting prices to distinct downward pressure.

Fuel oil is a direct downstream product of crude oil; a decline in crude oil prices will weaken cost-side support for fuel oil, placing pressure on both spot and futures prices.

The cost structure of petroleum asphalt is highly dependent on crude oil; a pullback in crude oil prices will erode cost-side support for asphalt, leading to a corresponding decline in both spot and futures prices.

The upstream source for PTA is crude oil; the current bearish news regarding crude oil will slightly weaken cost-side support for PTA, exerting minor downward pressure on its price.

The cost structure of styrene exhibits a high correlation with crude oil; a decline in crude oil prices will slightly drag down the price trajectory of styrene.

The upstream feedstock for propylene is crude oil; a pullback in crude oil prices will slightly reduce cost-side support for propylene, creating a minor bearish factor for its price.

Polyester staple fiber is a downstream product of PTA; the bearish impact from crude oil is expected to transmit through the polyester staple fiber supply chain, exerting minor downward pressure on its price.

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