Crude oil fund triggers premium warning; Southern Crude Oil LOF halts trading for the second time during the trading day

On March 3rd during midday, the Shanghai Stock Exchange announced that, upon application by Southern Fund Management Co., Ltd., trading of the Southern Crude Oil Securities Investment Fund (Stock Code: 501018) would be suspended from the market opening on March 3, 2026, until the close of trading.

Shanghai Stock Exchange screenshot

Notably, the secondary market trading price of the Southern Crude Oil LOF fund is significantly higher than its net asset value. On March 2, 2026, the closing price of the Southern Crude Oil LOF in the secondary market was 1.583 yuan, while the net asset value per share on February 26, 2026, was 1.2531 yuan, showing a substantial premium. To warn of risks, the fund was suspended from trading starting at market open on March 3, 2026, until 10:30 AM, after which it resumed trading and hit the daily limit up at midday.

In fact, due to the ongoing escalation of geopolitical tensions, the international crude oil market has experienced intense volatility. On March 2, several oil-related listed open-ended funds (LOFs) saw a surge in their secondary market trading limits. By midday on March 3, oil and gas stocks continued to hit the daily limit up, with China National Petroleum Corporation (CNPC) experiencing consecutive limit-ups, and multiple oil-related LOFs also hitting the limit up for two consecutive days. Additionally, global oil and gas energy LOFs, Huabao Oil & Gas LOF, and others rose over 9%.

It is important to note that all recent oil LOF funds have issued risk warning notices regarding premium risks, as their secondary market trading prices have shown significant premiums. Currently, several oil LOFs have high premium rates, with some exceeding 43%, leading the category.

Wind data screenshot

CITIC Securities’ latest research report indicates that the oil tanker freight rate mechanism is undergoing a reshaping, with geopolitical events strengthening cyclical momentum. Structural opportunities in both freight valuation and asset structure are expected to continue. The supply chain restructuring caused by geopolitical conflicts has become the core driver of this oil shipping cycle. The Strait of Hormuz accounts for about 30% of global crude oil and petrochemical transportation. Any fluctuations there are likely to become a “bullish option” for the oil tanker cycle, with VLCCs leading the elasticity. The freight rate formation mechanism is being reshaped, with the off-season characteristics weakening. Under the influence of geopolitical factors, conflicts will reinforce cyclical momentum, and leading oil tanker companies are expected to see record-high profits in 2026.

(Sources: Shanghai Stock Exchange, CITIC Securities Research, Wind Data)

(Edited by: Xu Nannan)

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