Everbright Securities: Geopolitical Risk Accumulates Oil Price Fluctuations, Highlights the Strategic Value of “Three Barrels of Oil”

The Zhitong Finance App learned that Everbright Securities released a research report saying that if the US-Iran conflict continues, the crude oil market regulation mechanism may fail, causing the market to face greater fluctuations. Our own resources of “three barrels of oil” are the foundation for China to guarantee its own energy security. Enhancing domestic supply capacity has always been a strategic support and reliable way to guarantee energy security. The “three barrels of oil” performance is expected to fully benefit from rising oil prices. At the same time, in the context of low interest rates, the “three barrels of oil” dividend rate has remained stable for a long time, and is scarce as a long-term high-dividend company. The current “three barrels of oil” dividend ratio is still attractive, and the value of high dividend allocation is prominent.

The main views of Everbright Securities are as follows:

The geographical situation in the Middle East continues to be tense, and fluctuations in the crude oil market have intensified

The situation in the Middle East was tense last week, and oil prices rose rapidly. As of July 24, Brent and WTI crude oil futures prices closed at 92.82 and 90.47 US dollars/barrel respectively, up 5.2% and 10.6% respectively from the close of last week, and 30.4% and 32.9%, respectively, from the beginning of July. This week, the Houthis began threatening Red Sea shipping and announced a blockade of Saudi oil transportation through the Red Sea, greatly increasing the risk of Saudi oil exports. However, Trump ordered the US military on the 24th not to launch an attack on Iran that day, breaking the previous situation where the US military launched air strikes against Iraq for 13 consecutive days, and cooled the market's expectations about the geopolitical situation. The bank expects that negotiations between the US and Iran on the right of passage, sanctions against Iraq, and Iran's nuclear issue will be difficult to reach an agreement in the short term. The military conflict and partial blockade of the strait will continue to affect oil prices during this period. During the last round of the US-Iran conflict, buffer reserves in the crude oil market were heavily consumed. Although the global oil reserves observed by the IEA rose for the first time since June and March, the main reason was that crude oil in transit at sea increased dramatically, far exceeding the continuous removal of onshore storage tanks. The increase in offshore in-transit stocks stemmed from the brief opening of the Strait of Hormuz and Middle Eastern countries rushing for crude oil. As the strait was closed again, this part of the replenishment mechanism faced failure. If the conflict between the US and Iran continues, the crude oil market regulation mechanism may fail, causing the market to face greater fluctuations.

High oil prices are improving, and energy security demands strengthen the strategic value of “three barrels of oil”

The “three barrels of oil” performance is expected to fully benefit from rising oil prices. The bank expects that if the oil price center rises from 85 US dollars/barrel to 100 US dollars/barrel, the operating profit of CNPC's oil extraction business is expected to increase by about 28 billion yuan, the operating profit of Sinopec's oil extraction business is expected to increase by about 4.5 billion yuan, and the net profit of CNOOC to mother is expected to increase by about 24 billion yuan. The US-Iran conflict has seriously blocked the transportation of key raw materials such as crude oil, naphtha, and liquefied natural gas in the Middle East, posing a serious threat to China's supply of key energy and petrochemical raw materials. Our own resources of “three barrels of oil” are the foundation for China to guarantee its own energy security. Enhancing domestic supply capacity has always been a strategic support and reliable way to guarantee energy security. Furthermore, as an important state-owned enterprise and a multinational company operating globally, “Three Barrels of Oil” actively takes the lead in “going global”, deeply participates in global energy governance, continuously optimizes asset structures, business structures and regional layout, enhances energy resource utilization capabilities, improves energy transportation channel construction, provides important support to guarantee the country's energy supply and accelerate the energy revolution, and makes positive contributions to global energy development.

Valuation fell back to a low level, and the high dividend allocation value of “three barrels of oil” was highlighted

As of July 24, 2026, CNPC, Sinopec, and CNOOC A-share PB-MRQ were 1.24, 0.75, and 1.81 times, respectively, and the H-share PB-MRQ was 1.00, 0.54, and 1.16 times, respectively. The valuation level dropped significantly from the March high. “Three barrels of oil” has always paid attention to shareholder returns. CNPC, Sinopec, and CNOOC's 25-year dividend payout rates are 55%, 76%, and 45%, respectively. According to Wind's unanimous expectations, as of July 24, the 26-year dynamic dividend rates for CNPC A and H shares were 5.1% and 6.4%, respectively, the 26-year dynamic dividend rates for Sinopec A and H shares were 5.4% and 7.5% respectively, and the 26-year dynamic dividend rates for CNOOC A and H shares were 4.8% and 7.5% respectively. In the context of low interest rates, the “three barrels of oil” dividend rate has remained stable for a long time, and is scarce as a long-term high-dividend company. The current “three barrels of oil” dividend ratio is still attractive, and the value of high dividend allocation is prominent.

Risk analysis: The growth rate of upstream capital expenditure fell short of expectations, and crude oil and natural gas prices fluctuated sharply.