Oil-related stocks across the board experienced a strong upward trend, with CNOOC Ltd (00883) rising 3.93% to HKD 24.32, PetroChina Co Ltd (00857) gaining 3.08% to HKD 9.86, and Sinopec Corp (00386) up 1.5% to HKD 4.385. The surge is driven by renewed uncertainty surrounding US-Iran negotiations, as WTI crude oil futures surpassed USD 82 per barrel on Monday, with Brent crude approaching USD 88 per barrel.
President Trump stated that after Iran demanded war reparations, he instructed US negotiators to seek compensation from Iran. In response, Iranian officials have indicated they will not engage in talks with the US until the end of Trump's term. Additionally, last week, the US Strategic Petroleum Reserve (SPR) decreased by 6.1 million barrels, falling to 298.7 million barrels.
Guosen Securities noted that ongoing geopolitical instability in the Middle East, combined with disruptions to shipping through the Strait of Hormuz and the Bab el-Mandeb, as well as the suspension of pipeline operations along the Caspian Sea, has significantly reduced global crude oil supply. With the Northern Hemisphere now in its peak summer demand season, low inventory levels are amplifying price volatility. In this high-oil-price environment, upstream oil and gas companies are well-positioned to capture strong earnings elasticity, while coal-to-olefins and overseas integrated refining sectors with low-cost advantages are set to benefit notably.
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