Geopolitical conflicts trigger a rise in international oil prices, with major oil companies increasing their oil price expectations. "Three major oil companies" profit forecasts and target prices have risen in unison.

The escalating tension in the geopolitics of the Middle East continues to rise, with the conflict between the US and Iran intensifying. Iran's blockade of the Strait of Hormuz has triggered global energy supply fears, causing international oil prices to fluctuate significantly and enter a high volatility zone. Brent crude oil broke through $94 per barrel last Friday (March 6), soaring 28.4% for the week, marking the largest weekly gain since April 2020; New York crude oil recorded its largest weekly increase in 43 years, surging 35.6%. With the strong performance of oil prices, many international banks have raised their profit forecasts and target prices for the "Big Three Oil Companies," making the energy sector an instant market focus. International banks raise target prices and profit forecasts for the "Big Three Oil Companies" JP Morgan: Upgrades CNOOC profit forecast and target price to "Overweight" JP Morgan analysts pointed out in a report that market expectations for the duration of the Middle East conflict have shifted from days to weeks, or even possibly over a month now. Over 70% of CNOOC's production is crude oil, making it the most sensitive to oil price changes among Asian energy stocks. Therefore, the earnings per share forecasts for CNOOC for 2026 and 2027 have been raised by 41% and 19%, respectively, and their H-shares and A-shares target prices have been raised to HK$31 and RMB 47, respectively, with a rating upgrade to "Overweight." The bank recommends holding high-quality upstream companies like CNOOC during this period of high volatility as a hedge against inflation. Morgan Stanley: Raises target prices for "Big Three Oil Companies" with a "Hold" rating Morgan Stanley remains bullish on the "Big Three Oil Companies," expecting the market to continue to focus on energy security, which will support the strategic value and sustainable profits of PetroChina Group. The H-share target price for PetroChina has been raised from HK$10.25 to HK$13.25, and the A-share target price for PetroChina Group has been raised from RMB 11.4 to RMB 14.7. Additionally, the bank believes that although SINOPEC CORP is facing inflation pressures in transportation costs, they are partially offset by inventory gains and the appreciation of the Renminbi. At the same time, if raw material supplies continue to be limited, the fuel and chemical markets in mainland China may shift from structural oversupply to undersupply, supporting a stronger profit margin for Sinopec, which would indicate an upward trend in downstream profits; the H-share target price for Sinopec has been raised from HK$6.4 to HK$6.98, and the A-share target price for SINOPEC CORP has been raised from RMB 6 to RMB 8. The target price for CNOOC has also been raised from HK$17.6 to HK$28.9. The H-shares of the "Big Three Oil Companies" all received a "Hold" rating. UBS: Upgrades profit forecasts for the "Big Three Oil Companies," Brent average price forecast raised to $72 UBS recently raised profit forecasts for the "Big Three Oil Companies" for this year, based on the latest oil price forecast. UBS has raised profit forecasts for PetroChina, CNOOC, and SINOPEC by 13%, 16%, and 0.4%, respectively, to RMB 183.3 billion, RMB 148.1 billion, and RMB 52 billion. At the same time, the H-share target price for PetroChina has been raised by 10% to HK$12.6, the A-share target price for PetroChina has been increased by 8% to RMB 15.1; the H-share target price for CNOOC has been raised by 12% to HK$33.6, and the A-share target price for CNOOC has been increased by 13% to RMB 47.5. UBS maintains CNOOC H-shares and PetroChina H-shares as industry top picks. Bank of America: Middle East tensions may affect China's oil and gas supply, upgrades target prices for PetroChina and SINOPEC Bank of America released a research report stating that the tense situation in Iran may affect China's oil and gas supply. The report pointed out that the Strait of Hormuz accounts for about 20% of global oil supply, including exports from Saudi Arabia, the UAE, Iraq, Kuwait, and Iran, as well as a large amount of liquefied natural gas from Qatar. By 2025, China's net crude oil imports will reach 575 million tons, and natural gas imports will reach 174 billion cubic meters, accounting for 73% and 42% of its apparent consumption respectively. Imports transported through the Strait of Hormuz make up about 36% of China's total crude oil imports and 16% of its natural gas imports. The report believes that PetroChina has the lowest dependence on imported crude oil among the three major oil companies, controlling about 60% of China's natural gas supply. Considering the rise in oil prices and an assumed increase in natural gas prices, Bank of America raises profit forecasts for 2026-27 by 2-3%. The target price for PetroChina is raised to HK$10.5, with a "Buy" rating. Regarding SINOPEC, the report points out that it is more advantageous than local refineries because its diversified crude oil supply allows it to gain additional market share when the operating rates of local refineries decline. As long as the price of crude oil remains below $130 per barrel, refineries can pass higher raw material costs on to end-users based on the pricing mechanism of the National Development and Reform Commission. The target price for SINOPEC has been raised to HK$6, maintaining a "Buy" rating. Bank of America has upgraded China Oilfield Services from "Neutral" to "Buy", with a target price raised from HK$9 to HK$12.6. Although profit forecasts remain unchanged, the market tends to revalue oilfield services assets under a trend of rising oil prices, using a valuation of 1.06 times the market-to-book ratio. HSBC: Raises target prices for the "Big Three Oil Companies," maintains PetroChina as the top pick HSBC's research report states that they maintain a "Buy" rating for CNOOC and PetroChina H-shares, and raise the target prices for both stocks to HK$32 and HK$11.5, up from HK$22.9 and HK$10.1, representing increases of approximately 40% and 14% respectively. HSBC maintains a "Hold" rating for SINOPEC H-share, with the target price raised by 31% to HK$5.9. The tense geopolitical situation has led to an increase in oil prices, making CNOOC's profit performance more sensitive to oil price changes compared to PetroChina. HSBC maintains PetroChina as the top pick, as its business in the oil and gas sector has diversified and provides stable cash flow to support dividends. They also remain bullish on CNOOC, as it owns high-quality assets and has strong production growth, but there are some downward risks to watch out for, such as the reversal of risk premiums, the impact of a weak US dollar on revenue growth, and potential underperformance for the whole year. As for SINOPEC, their profit performance last year was expected to be weak, and their chemical business is full of challenges, as they continue to face overcapacity issues, meaning that with a dividend payout ratio of 78%, their distribution space is limited. Bullish sentiment on oil prices is high, as major banks intensively raise oil price expectations Regarding oil prices, major international investment banks and research institutions generally believe that oil prices will receive strong support in the short term, and extreme scenarios of significant steep increases are not ruled out. UBS has raised its average price forecast for Brent crude oil in 2026 to $72 per barrel, reflecting the current almost closure of the Strait of Hormuz. The bank's basic assumption is that the conflict will continue for several weeks and that shipping through the Strait of Hormuz will remain severely disrupted, while the key oil infrastructure in the GCC countries will not be affected. Barclays believes that if the conflict in the Middle East continues for another few weeks, there is a 10% chance that Brent could reach $150 per barrel by the end of this month. These numbers may seem high, especially considering the general pessimism in the market about the outlook for the oil market at the beginning of this year. However, they reinforce that the current fundamentals are stronger, and the risks are greater than during the Russia-Ukraine conflict. In China, when oil prices exceed $80 per barrel, due to government regulation, the processing profit margin used to set refined oil prices will gradually decrease, possibly even falling to 0. Despite the US government's statement that the conflict may last for several weeks, Morningstar still maintains an expectation of an average of $65 per barrel for Brent crude oil in the medium term. Morningstar's basic prediction is that futures prices will remain above the medium-term level but will eventually decline. Guangda International Securities strategist Wu Lixian predicts that oil prices are currently mainly driven by geopolitical and market sentiment and are expected to remain at high levels in the short term, with oil stocks likely to continue their upward trend. Morgan Stanley released a research report raising its Brent crude oil price forecast for 2026 to $72.5 per barrel, with forecasts of $65 per barrel for 2027 and the long term. Goldman Sachs points out that if oil shipping in the Strait of Hormuz is disrupted for the next five weeks, the price of Brent could rise to $100 per barrel. Goldman Sachs has raised its forecast for Brent oil this year by $10 to $76, and the forecast for New York crude oil has been raised by $9 to $71. Previously, JP Morgan stated that if the conflict escalates and the Strait of Hormuz remains closed for more than 25 days, storage restrictions will force multiple oil-producing countries in the Middle East to stop production, and Brent could be pushed to $100 to $120 per barrel. Citi also suggests that if oil infrastructure in the region is damaged, oil prices could rise to $120 per barrel. BOCI report points out that oil prices have shown unexpectedly strong performance so far this year. The price of Brent oil has risen from around $60 per barrel at the beginning of the year to around $73 per barrel on February 27, an increase of over 20%. The tense geopolitical situations in Venezuela and Iran are the main drivers of the increase in oil prices. With Iran escalating retaliatory actions, oil prices will further rise in the short term, with Brent oil potentially reaching $80. The closure of the Strait of Hormuz, which will affect daily oil transportation of 10 to 12 million barrels, but the bank emphasizes that once the crisis is resolved in the next few weeks, oil prices may eventually fall.