China Securities Co., Ltd.: Tensions rise again in the Middle East, Russia, and Ukraine, oil, gas, and coal prices have the resilience to resist inflation.

China Securities Co., Ltd. released a research report stating that the current situation is still in a period of stagnation and depression. Looking at the long-term performance, stagnation and depression periods are often accompanied by a slowing economy and intensifying geopolitical struggles. During this stage, oil, gas, and coal, as irreplaceable strategic physical assets, not only have inflation-resistant characteristics, but also show significant advantages over general financial assets in a stagflation environment with wide fluctuations or upward movement in the central axis. The investment logic of energy companies is accelerating towards becoming dividend assets with "strong free cash flow, high dividends, and continuous buybacks." The main points of China Securities Co., Ltd. are as follows: Crude Oil: Tensions between the US-Iran and Russia-Ukraine have escalated, pushing oil prices higher this week. At the beginning of this week, oil prices continued their downward trend. After a temporary ceasefire agreement between the US and Iran, the flow of crude oil in the Strait of Hormuz resumed, geopolitical risk premiums were quickly cleared, and loose supply dominated the market. On Wednesday, President Trump announced that the ceasefire has ended, the US launched a new round of airstrikes against Iran, commercial ships in the Strait of Hormuz were attacked, the US revoked Iran's oil export waivers, and Russian refineries were hit by drones with a diesel export ban in place. Geopolitical risks sharply returned, leading to a significant jump in oil prices. Looking ahead to the second half of the year, with Middle East supply recovery and floating storage clearance, limited elasticity in demand recovery and regional low inventory will create a tug of war, and oil prices are likely to enter a period of wide fluctuations. This week, the spot price of Brent crude oil was $74.27 per barrel, up 5.92% compared to the previous week; the spot price of WTI crude oil was $71.20 per barrel, up 2.79% compared to the previous week. Xinjiang Coal Chemical Industry: With energy security and cost advantages, Xinjiang's coal chemical industry 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, turning Xinjiang from a rear to a front gateway, taking advantage of its geographical position. The balance between energy security and dual carbon environmental protection has begun to tilt, and the king of coal chemical industry has returned. Xinjiang has become the focus of energy security relying on its resource advantages. From Xinjiang's own perspective, development promoting stability has become the main line for Xinjiang. Historically, Xinjiang has adjusted the balance between development and stability, and at present, Xinjiang is in an important strategic opportunity period for high-quality development. The development of the coal chemical industry in Xinjiang and the US shale gas have similarities, requiring long-term investment in underlying technology and infrastructure by the country, ultimately overcoming external energy dependence. Natural Gas: Qatar suspends LNG production increase plans, tightening global supply. Influenced by the escalation of tensions in the Strait of Hormuz, Qatar has suspended efforts to restore capacity at the Ras Laffan liquefied natural gas facility, with operations maintained at the lowest level and a decrease in the number of planned ship arrivals in the future. Previously, Qatar was pushing ahead with plans to restore most of its LNG capacity within two months, a decision that may further tighten the global natural gas market and intensify competition between Asia and Europe for winter storage. Asian LNG spot prices are now over 80% higher than pre-conflict levels. As of July 11, US natural gas inventories were 2983 Bcf, up 61 Bcf from the previous week and up 30 Bcf from the same period last year; this week's average NYMEX natural gas price was $3.14 per million British thermal units, down 2.1% from the previous week. Risk Warning: Risks of significant fluctuations in international oil prices; risks of downstream demand recovery falling short of expectations; risks of overcapacity and policy regulation.