HK Stock Market Move | Oil and oil service stocks fell in early trading, with the ongoing turmoil in Iran continuing to disrupt oil prices. Institutions warn to be wary of potential geopolitical event reversals.

Oil and oil service stocks fell in the early trading session, as of press time, Shandong Molong Petroleum Machinery (00568) dropped by 8.6% to HK$3.93; SINOPEC SSC (01033) dropped by 7.22% to HK$0.9; China Oilfield Services (02883) dropped by 1.98% to HK$8.4; CNOOC (00883) dropped by 2.87% to HK$23.68; PetroChina (00857) dropped by 2.16% to HK$9.08. On the news front, on Monday, WTI crude oil fell by 4% and Brent crude oil fell by over 5%. Iranian Foreign Minister Javad Zarif recently stated in an interview that Iran may reach a fair agreement with the US. Additionally, an Iranian official stated that there are no plans for the Islamic Revolutionary Guard Corps to conduct exercises in the Strait of Hormuz, and Iran has not issued any such statements. Previous reports of Iran conducting live-fire exercises in the area were "incorrect." Huatai Futures released a research report stating that the current rise in oil prices is a result of a convergence of geopolitical, macroeconomic, and liquidity factors. Due to the sharp decline in precious metals on Friday and Jerome Powell's appointment as Federal Reserve chairman, the US dollar is expected to stabilize and rebound. At the same time, the macro narrative of the US dollar credit collapse is also expected to be alleviated. The macroeconomic sentiment and the weakening of the US dollar have a mitigating effect on oil prices. Associated liquidity factors may also recede. Geopolitically, the situation in Iran remains highly tense, and the Strait of Hormuz is a crucial chokepoint for global oil exports. The development of the situation needs to be closely monitored, as it continues to provide strong support for short-term oil prices, but caution should be exercised to prevent a significant decline similar to the rapid reversal seen in June 2025.