International oil prices fell by over 11% in a single day, marking the largest drop since 2022

Specifically, WTI crude oil futures on the New York Mercantile Exchange performed poorly, falling sharply by $11.32 on the day, a drop of up to 11.9%, and ultimately closing at $83.45 per barrel, hitting a intraday low of $81.19 per barrel, a drop of nearly 28% from the previous day's high; London Brent crude oil futures fell sharply at the same time, dropping $11.16, or 11.28%, to close at $87.80 per barrel. The daily decline of both major crude oil futures contracts reached their peak in nearly four years, becoming the focus of global financial market attention.

This historic plunge is not accidental, but the result of multiple positive signals resonating, market sentiment reversing, and technical selling. Behind it is a fierce game of multiple factors such as geopolitics, policy intervention, and market structure. Previously, due to the escalation of geopolitical conflicts in the Middle East, the passage of the Strait of Hormuz, a key global energy channel, was blocked. Market concerns about oil supply shortages continued to rise, pushing international oil prices to approach $120 per barrel on March 9th. WTI and Brent crude oil futures had a maximum amplitude of $35 in 24 hours, highlighting the fragility of extreme event driven markets.

On March 10th, the market plot underwent a dramatic reversal, with three key signals collectively extinguishing the market's panic and becoming the core driving force behind the sharp drop in oil prices. Firstly, the signal of easing geopolitical conflicts has been clearly released. US President Trump has stated that the military action against Iran is "very thorough" and the war will "end soon", instantly diluting the geopolitical premium caused by the tense situation in the Middle East and easing market concerns about energy supply disruptions. Secondly, the Group of Seven (G7) urgently held a conference call to discuss the release of strategic oil reserves to address oil security risks. Although no official measures were announced, they sent a signal of "stabilizing prices" to the market, greatly calming market sentiment. Finally, Iran stated that it has not completely blocked the Strait of Hormuz, further easing supply anxiety. Coupled with the large number of profit taking positions accumulated during the previous surge in oil prices, which were liquidated and fled, a programmed stop loss order was triggered, forming a "stampede style" correction market and further expanding the decline in oil prices.

Industry experts analyze that behind the sharp drop in oil prices, there is also a vulnerability in the market's microstructure. Zheng Ruojin, Vice President of the State Investment Futures Research Institute, said that during the period of the sharp rise in oil prices, there is a problem of insufficient liquidity in the European and American markets, and prices are somewhat inflated. Once negative news is released, the market is prone to a sharp reversal, and the concentrated profit taking by bulls further exacerbates the decline. In addition, from a fundamental perspective, at the beginning of the year, the International Energy Agency (IEA), the US Energy Information Administration (EIA), and OPEC all predicted a global oversupply of crude oil by 2026. This fundamental factor also laid the groundwork for a pullback in oil prices, but was masked by the panic caused by geopolitics in the early stage.