China Securities Co., Ltd.: Energy assets' risk premium is systematically rising, focusing on the autonomous and controllable development of energy in Xinjiang.

China Securities Co., Ltd. released a research report stating that, from the perspective of a long cycle performance, the recession of the Kangbo often accompanies a decline in economic growth and intensified geopolitical competition. During this stage, oil, gas, and coal, as irreplaceable strategic physical assets, not only possess inflation resistance, but also demonstrate characteristics of wide range oscillation or upward movement in a stagflation environment that are significantly better than general financial assets. The investment logic of energy companies is transformed into dividend assets with "free cash flow + high dividends + continuous repurchase" characteristics. The increased probability of a bottom war raises the risk premium of energy assets systematically, from the perspective of national energy security, it is necessary to pay attention to the energy self-control construction in Xinjiang. The main points of China Securities Co., Ltd. are as follows: Crude Oil: Speculation on the ceasefire between the US and Iran, oil prices fluctuated at a high level this week This week, Trump stated that the US and Iran had a good and effective dialogue, and postponed the strike on Iranian energy facilities, sending out a signal of easing tensions between the US and Iran causing oil prices to plummet. However, Iran denied progress in the talks, causing oil prices to rebound slightly. On the other hand, Houthi armed forces announced their participation in the war this week, potentially blockading the Bab el-Mandeb Strait. If this strait is closed, crude oil exports from the Saudi Arabian Yanbu port will be restricted, further exacerbating the shortage of oil in Asia. Looking ahead, the Strait of Hormuz remains the core of marginal fluctuations in oil prices. In the short term, oil prices have not yet fully priced in the closure of the Strait of Hormuz. If the closure continues, oil prices will continue to rise. In the long term, even if the Strait of Hormuz remains open, this risk premium will be defined in oil prices for a long time, keeping oil prices at a high level. Xinjiang Coal-to-Chemical: Energy security + cost advantage, Xinjiang Coal-to-Chemical is expected to usher in a golden age From a national strategic perspective, Xinjiang benefits from two major shifts: from a coastal economy to the Belt and Road Initiative, Xinjiang has transitioned from a rear position to a front-line gateway, gaining a geographical advantage. The balance between energy security and dual carbon environmental protection begins to shift towards coal-to-chemicals, with Xinjiang becoming the hub for energy security thanks to its resource advantage. From Xinjiang's perspective, development to promote stability is the main theme. Historically, Xinjiang has balanced between development and stability, and is now in an important strategic opportunity period for high-quality development. The development of Xinjiang's coal-to-chemical industry has similarities to the shale gas in the United States, requiring the country to make long-term investments in fundamental technology and infrastructure to overcome external energy dependencies. Natural Gas: Australian Santos temporarily closes flagship LNG project Australia's second-largest oil and gas producer, Santos, has temporarily closed its Darwin LNG plant in the Northern Territory, disrupting the supply chain for exports from the newly commissioned Barossa gas field project. The shutdown occurred due to the need to replace several compressor dry gas seals on the floating production storage and offloading vessel (FPSO) "BWOpal". A company spokesperson stated that this was a planned equipment replacement operation, currently in the final debugging stage, and production will return to full capacity once completed. Risk Warning: Risks of significant fluctuations in international oil prices; risks of downstream demand recovery falling short of expectations; risks of overcapacity and policy control adjustments.