HK Stock Market Move | Oil stocks continue recent gains as the escalation of tensions between the US and Iran, combined with the peak season for refined oil products, lead to international oil prices rebounding.

Oil stocks continued their recent upward trend. As of the time of writing, CNOOC (00883) rose by 5.46% to 23.96 Hong Kong dollars; PetroChina (00857) rose by 5.21% to 10.09 Hong Kong dollars; China Oilfield Services (02883) rose by 3.85% to 7.02 Hong Kong dollars; Sinopec (00386) rose by 1.88% to 4.34 Hong Kong dollars. On the news front, on January 19th local time, both the US and Iran issued statements regarding the situation in the Strait of Hormuz, with each side claiming different information. The US claimed that ships are still able to pass through the Strait of Hormuz normally, while Iran stated that the navigation in the strait has decreased to zero. On the same day, after conducting another round of airstrikes on Iran, the US military attacked the Iranian oil town of Abadan. Ping An Securities pointed out that in the short term, tensions between the US and Iran have escalated again, leading to the blockade of the Strait of Hormuz and an increase in demand for refined oil products in the peak season, causing oil prices to rise again. However, they believe that the intensity and duration of this round of conflict may be weaker than the initial stage of the conflict outbreak, with overall geopolitical risks trending downwards. Brent oil prices may return to around 80 dollars per barrel in the future. Faced with the intense fluctuations in international oil prices, domestic oil companies have reduced their sensitivity to oil prices through integrated upstream and downstream operations and diversifying oil and gas sources. They have also accelerated their investments in the opening up of offshore oil and gas resources in order to reduce the degree of reliance on external energy sources.