The Hormuz Strait remains closed, causing oil and gas stocks to fall back to levels before the war.

On April 20th, after a weekend of tug-of-war from all sides, the Strait of Hormuz was still not open for passage. However, oil and gas stocks, which had sharply risen after the start of the war, have collectively fallen back to the level before the war at the end of February. Some industry insiders believe that the market has already digested most of the impact of the US-Iran war. In the medium to long term, due to ongoing supply shortages and continued strong demand in the energy sector, as well as the development of artificial intelligence which benefits energy demand, investing in the energy upstream sector is still worthwhile. Additionally, if the conflict escalates, the oil and gas sector may become a major safe haven for the market. On the morning of April 20th, stocks of companies focusing on upstream oil and gas extraction, such as CNOOC, PetroChina, China Oilfield Services, and Shandong Molong, have fallen back to pre-war levels. CNOOC fell by 0.67%, closing at 37.09 yuan, falling below the 37.3 yuan on February 25th. Similar situations were seen in the other mentioned stocks. "The situation in the Strait of Hormuz will only bring short-term pulse-like fluctuations, unable to change the long-term value and development trend of the sector," said Pan Jun, investment manager of Cheese Fund, to reporters. The recent adjustment in oil and gas-related assets is due to the fact that the market premium created by the geopolitical risks of the Strait of Hormuz has completely dissipated, and not because of any substantial deterioration in the industry's fundamentals.