Dongxing Securities: The middle to high sector due to oil price shocks may maintain a high level of prosperity

The Zhitong Finance App learned that Dongxing Securities released a research report saying that in a context where the oil price center is expected to be medium to high, it will focus on companies with high dividends and high growth. Market value management assessments are being promoted, and high dividend rates are expected to continue in the future. The dividend rates for CNPC, Sinopec, and CNOOC in 2025 were 54.68%, 81%, 44.87%, and 44.87%, respectively. In the future, as profits gradually expand, the dividend rate of three barrels of oil will continue to rise, and the dividend ratio is also in a high position in the high-dividend sector. The bank recommended CNOOC (600938.SH) and CNOOC (00883). Also expected to benefit targets: CNPC (601857.SH), CNPC (00857), and New Natural Gas (603393.SH).

Dongxing Securities's main views are as follows:

The crude oil market is in a game of “strong dollar suppressing valuations” and “geographical conflicts support prices”, and profits in the oil and gas extraction, refining, and trade sectors have recovered significantly

Currently, the crude oil market is in a fierce game between “strong US dollars suppressing valuations” and “geopolitical conflicts supporting prices.” In the short term, the trend of crude oil prices will be highly dependent on the evolution of the situation in the Middle East: if conflicts ease and oil prices fall, the strengthening of the US dollar will have a double impact on oil prices; if the situation continues to be tense, the rigidity of crude oil supply will make it show strong resistance to falling, but the constraining effect of high oil prices on global demand will also increase.

The domestic economy has strong resilience and resilience. The domestic manufacturing PMI for 2025 was 49.57%. From January to June 2026, the domestic manufacturing PMI was 49.3%, 49.0%, 50.4%, 50.3%, 50.0%, and 50.3%, respectively. The PMI trend has proven that the domestic economy has strong resilience and resilience. With the acceleration of the pace of resumption of work after the holiday season and the continued release of the dividends of the steady growth policy, the manufacturing boom has steadily rebounded. However, in the future, we still need to pay close attention to the sustainability of the recovery in domestic demand, the actual driving effect of policies to expand domestic demand, and the potential impact of overseas geopolitical conflicts on global inflation and the profits of companies in the oil and gas extraction, refining, and trade sectors.

Profitability in the oil and gas extraction sector increased. In 2025, the total revenue from domestic A-share oil and gas extraction was 409.709 billion yuan, down 5.53% year on year. Total net profit from oil and gas extraction was 123.768 billion yuan, down 12.15% year on year. 2026Q1, total revenue from oil and gas mining was 118.768 billion yuan, up 7.84% year on year, and total net profit of oil and gas mining was 39.545 billion yuan, up 5.79% year on year.

Profits in the refining and trading sector have recovered significantly. In 2025, the total revenue of domestic A-share refining and trading was 6738.250 billion yuan, down 6.46% year on year. Total net profit of refining and trading was 19.631 billion yuan, down 12.14% year on year. 2026Q1, despite pressure on the revenue side, the refining and trading sector successfully achieved a significant recovery in profit margins through inventory appreciation, cost compression, and product structure optimization. In 2026 Q1, total revenue from refining and trading was $1696.149 billion, down 3.63% year on year. Total net profit from refining and trading was $78.415 billion, up 22.22% year on year.

Oil and gas extraction, refining, and trade: Oil prices fluctuate at medium to high levels, and the sector may maintain a high level of prosperity. Oil prices fluctuated downward in 2025 and bottomed out. Geographical conflict intensified in the first half of 2026, and oil prices soared sharply. From January to December 2025, the average monthly spot price of Brent crude oil was 68.25 US dollars/barrel, down 14.24% year on year. In 2026, the average spot price of Brent crude oil in the first quarter was 76.48 US dollars/barrel, up 1.45 US dollars/barrel year on year, up 1.93% year on year. The average price of Brent in the second quarter was 97.6 US dollars/barrel, up 30.69 US dollars/barrel from the previous month, or 45.87%.

Demand growth is expected, the supply side is substantially tightened, compounded by the US (SPR) falling to the bottom of 40 years, and oil prices fluctuate at a high level

The International Energy Agency raised its forecast for oil demand growth in 2026. The International Energy Agency released its latest monthly report on January 21, which predicts that global oil demand will increase by an average of 930,000 barrels per day in 2026. The supply side has substantially tightened. At the beginning of 2026, the US-Iran conflict caused a cliff-style decline in exports. Based on the seven-day moving average, crude oil exports from the Gulf region have plummeted from 80% of normal levels in early July to pre-war levels of about 36%. Meanwhile, the capacity of fully loaded tankers on the Red Sea route dropped by 22%, and Saudi crude oil exports decreased by 2.4 million b/d compared to the same period last year. The increase in OPEC+ paper production was unable to be converted into actual circulation due to blocked waterways, and OPEC's ability to reduce unified production declined. Accelerated consumption of global inventories was compounded by a sharp decline in the US (SPR). The oil stocks of the Organization for Economic Cooperation and Development (OECD) member countries are expected to fall below 2.3 billion barrels in December 2026, approaching the lowest level since 2003. As of August 11, as the most important buffer force in the world, the total US SPR inventory fell below about 300 million barrels, setting a 43-year low since 1983.

The main line of crude oil in the medium term is still a game looking at the evolution of the Middle East situation and the fundamentals of supply and demand. On the one hand, it will still take time to fully recover oil production and refining capacity in the Middle East. Against the backdrop of a continuous decline in global oil inventories, there is little room for oil prices to fall, and the high level is still supported; on the other hand, the subsequent replenishment logic is expected to drive oil prices back up, and it is expected that the oil price center will remain volatile at a high level.

Oil prices remained high in the midst of shocks, and the revenue or profits of domestic A-share oil and gas extraction, refining and trading sectors were directly affected by oil prices

In 2025, the average spot price of Brent crude oil was 68.25 US dollars/barrel, down 14.24% year on year. The domestic A-share oil and gas extraction sector achieved a total revenue of 409.709 billion yuan, a year-on-year decrease of 5.53%; total revenue from refining and trade was 6738.250 billion yuan, a year-on-year decrease of 6.46%. The average spot price of 2026Q1 and Brent was 76.48 US dollars/barrel, up 1.93% year on year. The domestic A-share oil and gas mining sector achieved a total revenue of 118.768 billion yuan, an increase of 7.84% over the previous year; the refining and trading sector was affected by geographical conflicts, and companies expanded sales profits by relying on inventory or increasing the added value of products, resulting in net profit to 78.415 billion yuan, an increase of 22.22% over the previous year.

Risk warning: geopolitical risk; risk of large fluctuations in energy prices; risk of demand falling short of expectations.