Hong Kong stock concept tracking | The suspense of the Strait of Hormuz rises again, oil prices may surge to the range of 120-130 US dollars (with concept stocks)

On June 21st local time, US President Trump claimed that the US had completed attacks on three Iranian nuclear facilities in Fordo, Natanz, and Isfahan. Member of the Iranian Parliament's National Security Committee Kusari stated that the Iranian Parliament had concluded that the Strait of Hormuz should be closed, but the final decision lies with Iran's Supreme National Security Council. JPMorgan predicts that if the Strait of Hormuz is blocked, oil prices could soar to the range of 120-130 US dollars. The Strait of Hormuz, located between Oman and Iran, connects the eastern Arabian Gulf with the western Persian Gulf and is the only maritime passage for oil from the Gulf region to the rest of the world. In 2024, the average daily oil flow through the strait is 20 million barrels, including approximately 14 million barrels per day of crude oil and about 5 million barrels per day of refined products. This represents 20% of global oil consumption and approximately one-third of global seaborne oil trade volume. Additionally, according to Clarkson's statistics, 11% of global maritime trade volume passes through the Iranian-controlled Strait of Hormuz, including 34% of maritime crude oil exports, 30% of liquefied petroleum gas exports, 20% of liquefied natural gas trade, 18% of chemical trade, 7% of automobile trade, 3% of global container trade, and 2% of bulk cargo. While Saudi Arabia and the UAE have pipelines that can bypass the Strait of Hormuz, these pipelines have a daily effective capacity of only around 3.5 million barrels, equivalent to 20% of the current capacity. 85% of Iraq's oil depends on shipping through the strait, while Kuwait, Qatar, and Bahrain's oil exports rely entirely on this waterway. Citigroup states that if the Strait of Hormuz is blocked, Brent crude could soar to around 90 US dollars per barrel. However, the bank also points out that the disruption of this critical waterway is unlikely to be long-lasting. "Any closure of the Strait of Hormuz could lead to a substantial increase in oil prices," analysts Anthony Yuen and Eric Lee wrote in a report. "But we believe the closure should be short-lived, as efforts will be made by all parties to reopen it, so it should not be closed for months." Over the past week, WTI crude oil futures prices have risen by about 10%, while Brent crude oil futures have risen by 18% since June 10, reaching a five-month high of 79.04 US dollars last Thursday. If the blockade becomes a reality, the international oil benchmark Brent crude price could surpass the $100 mark. JPMorgan's report further points out that once the US gets involved, this conflict escalates into a full-scale war in the Middle East, this "red line" may be crossed. JPMorgan predicts that if the Strait of Hormuz is blocked, oil prices could soar to the range of 120-130 US dollars. In fact, Iran is not the first to use the Strait of Hormuz as a strategic lever. In the 1980s during the Iran-Iraq war, Iran laid mines and attacked oil tankers in the area, retaliating against military actions by Iraq and its allies. Although a long-term blockade did not occur during this period, it still caused severe export bottlenecks and a surge in shipping costs. Oil and gas giant Shell's CEO Wael Sawan warned that a potential blockade of the Strait of Hormuz could have a major impact. He said, "If this 'artery' is blocked, for whatever reason, it will have a huge impact on global trade." Cinda released a research report stating that under current long-term energy transition concerns, with an extended period of stability in oil prices and expected increases, oil companies may be more inclined to develop marine oil and gas resources with long development cycles but excellent resource endowments and lower barrel oil costs. Currently, the development of marine oil and gas resources is booming, and with the advancement of technology and equipment, dormant reserves are turning into surging production, enhancing the competitiveness of China's oil service industry in international markets. It is recommended to pay attention to resource targets and oil service targets that realize steady performance. Related concept stocks: CNOOC (00883): At the end of May, Research published by BI tells shows, cutting CNOOC's (00883) target price by 6.7%, from 21 Hong Kong dollars to 19.6 Hong Kong dollars, maintaining an "outperform market" rating. CNOOC's stock price has fallen by 7% since the beginning of the year, due to a 12% drop in oil futures prices. In the first quarter of 2025, the drop in oil prices translated to an 8% year-on-year decline in CNOOC's profit, higher than expected non-operating losses were also a contributing factor. The bank believes that CNOOC's projected 3% and 4% oil and gas production growth for the 2026 and 2027 fiscal years are conservative, hoping that the company can achieve its high-end guidance and maintain an optimistic attitude towards the company's new projects. PETROCHINA (00857): In early May, research published by China International Bank suggested that PETROCHINA's (00857) first-quarter profit increased by 2% year-on-year to 46.8 billion yuan, 9% higher than the bank's forecast. The surprising operating surplus in the group's upstream segment, despite a 7% year-on-year decline in oil prices, still saw a 7% year-on-year increase. The bank raised its profit forecast for the group for the 2025 to 2027 period by 1% to 2%, maintaining a "buy" rating, and slightly raising the H-share target price from the original 8.06 Hong Kong dollars to 8.08 Hong Kong dollars. SINOPEC CORP (00386): In early May, China International Bank released a research report stating that SINOPEC CORP (00386) saw a 25% year-on-year decline in profit to 14 billion yuan in the first quarter of this year, surpassing the bank's expectations. The company's exploration and production and chemical profit was better than expected. After adjusting for performance, the bank revised its profit forecast for the 2025 to 2027 period by -1.3% to +3.2%, maintaining a "buy" rating with a target price of 4.58 Hong Kong dollars.