Market conditions tend to weaken when oil and gas stocks rise, and today both mainland and Hong Kong markets turned lower, with the Hang Seng Index closing down 1.89%. The postponement of former President Trump’s visit to China has been announced by the White House on March 25, rescheduling it for mid-May. Repeated delays from March to April and now May point to a single underlying issue: unresolved tensions with Iran. The strategic expectation appears to be a swift resolution involving Iran, enabling negotiations backed by secured oil resources. The extended timeline suggests hostilities could persist for at least another month, with further delays possible. Trump recently claimed at a Republican fundraising dinner that Iran is eager to negotiate but hesitant to speak publicly. Meanwhile, Iranian Foreign Minister Araghchi stated that the U.S. has relayed proposals via intermediaries to end the conflict, which Iranian leadership is reviewing—though he clarified this does not constitute direct talks. Reports indicate Israeli Prime Minister Netanyahu ordered intensive airstrikes within 48 hours, partly to preempt any sudden U.S.-Iran peace agreement—a move seen by some as coordinated theatrics.
Additional factors are supporting oil prices: Ukrainian drone attacks on a key Russian oil export terminal, damage to a major pipeline, and detained tankers may have idled up to 40% of Russia’s export capacity. Separately, industry sources indicate Saudi Aramco plans to reduce crude supplies to Asia in April, supplying Arab Light crude only to long-term customers. Kpler data shows Saudi Arabia’s March crude exports averaged 4.355 million barrels per day, significantly below February’s 7.108 million barrels. International crude prices remain elevated, with WTI futures up 4.03% to $93.963 per barrel and Brent up 3.50% to $100.663. CNOOC (00883) rose over 2%. China Oilfield Services (02883) reported resilient annual earnings of RMB 3.8 billion, with drilling revenue up 12.8% as a core driver, and proposed a dividend of RMB 2.825 per 10 shares, gaining over 3%.
Supply constraints are intensifying. Japan began releasing national oil reserves on March 26, totaling approximately 8.5 million kiloliters, equivalent to 30 days of domestic consumption. The Philippines is exploring oil imports from nations under U.S. sanctions, potentially including Venezuela and Iran. Meanwhile, the Iranian officer responsible for blocking the Strait of Hormuz has died, and Iran is considering legislation to impose tolls on passing vessels, though details remain unclear pending further developments.
On Wednesday, global chemical giant BASF announced price increases for more products due to rising costs linked to the U.S.-Israel-Iran conflict, raising prices for its commodity amines portfolio in Europe by up to 30%, with some products seeing even higher hikes. Other chemical firms like Lanxess and Dow Chemical also announced price increases. China XD Group (01907) and China XLX Fertilizer (01866) both posted modest gains.
New energy vehicle makers performed well last year. Li Auto (02015) achieved profitability for the third consecutive year in 2025, while Leapmotor (09863) reported its first full-year profit. NIO (09866) and XPeng (09868) each recorded their first quarterly profits. In terms of annual deliveries, Leapmotor led with 596,600 vehicles, doubling from 293,700 in 2024. XPeng followed with 429,400 units, while Li Auto delivered 406,300—a notable decline from 500,500 in 2024, marking its first annual sales drop. NIO delivered 326,000 vehicles, up nearly 47% year-on-year, though it ranked last among the five. Leapmotor’s founder announced a 2026 sales target of 1 million units, and the stock rose against the market trend. The energy crisis stemming from Middle East conflicts appears to benefit China’s NEV sector, with global electrification trends and overseas demand acting as new growth drivers. Core battery suppliers stand to gain accordingly.
Reports on March 23 indicated Zimbabwe’s ban on lithium concentrate exports may last longer than expected. Supply disruptions from Jiangxi lithium mine licensing issues persist, while solid-state battery development enters a critical validation phase and energy storage demand exceeds forecasts. Tight supply-demand conditions are likely to sustain rising lithium carbonate prices. Ganfeng Lithium (01772) advanced nearly 4% today.
Other gainers were driven by earnings. Anhui Conch Clean Energy (00586) reported 2025 profit attributable to shareholders of RMB 22.45 billion, up 11.17% year-on-year, with a proposed final dividend of HKD 0.30 per share. Beyond waste treatment as its core profit contributor, the company has built an integrated lithium battery recycling and materials supply chain. The stock rose over 8%. MicroPort MedBot (02252) expects 2025 revenue to surge 110% to 120%, with an adjusted net loss narrowing over 50% to no more than RMB 240 million. The growth is attributed to breakthroughs in commercialization of its Toumai laparoscopic surgical robot, with robust sales and over 100 overseas orders signed, generating overseas revenue more than five times that of the previous year. The stock gained over 4%.
Jingwei Tian Di (02477) proposed a 1-for-4 stock split. While splits do not create intrinsic value, they often make shares appear cheaper and can spur price increases, akin to “filling the rights” in A-share markets. Notable U.S. examples like Tesla, Apple, and Nvidia have seen rallies post-split, though fundamentals ultimately determine performance. The stock rose over 9% today.
