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<Research>CLSA: Escalation in Iran Geopolitical Situation Benefits PETROCHINA/ CNOOC
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The escalation of geopolitical tensions surrounding Iran over the past weekend may boost oil prices to exceed US$80 per barrel in the short term, according to CLSA's research report. This development should bode well for Chinese oil companies, particularly PETROCHINA (00857.HK) and CNOOC (00883.HK), as both stocks are believed to serve as a cheap hedge against inflation on top of a yield of 5-6%. On the other hand, Chinese chemical stocks may face pressure due to higher input costs. The reasons include increased crude oil procurement costs as oil prices rise and discounts narrow due to a shift to other importing countries, as well as higher freight costs driven by instability in the Middle East. CLSA believed that the impact will be more significant on Chinese independent refiners, as most Iranian crude oil imports are independent refiners rather than SOEs. AASTOCKS Financial News Website: www.aastocks.com |
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