CITIC Construction Investment: Rising international crude oil prices continue to increase global energy security risks in winter

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the US-Iran memorandum of understanding has not yet expired, commercial navigation in the Strait of Hormuz has been restricted, and the WTI settlement price has risen to 85.83 US dollars, an increase of 5.64% in a single week; the share of UAE exports to Asia has risen to 27%-32%, filling part of the supply gap. The geographical situation in the Middle East and the restoration of waterways are still unclear, supply-side uncertainty is high, and the market remains on the sidelines. Global winter energy security risks escalate. The US-Iran Strait management impasse continues. More than 80% of Middle Eastern LNG capacity has stagnated, and Qatar's force majeure continues; the EU gas storage level hit a 17-year low of 61%, reaching only 72.2% after 47 days, making it difficult to achieve the winter gas storage target. LNG supply disturbances have changed from expectations to real risks, and the Eurasian winter rush will drive up procurement costs.

CITIC Construction Investment's main views are as follows:

Industry Overview

Judging from the performance of various transportation sub-sectors compared to the Shanghai and Shenzhen 300, the overall transportation sector rose this week (August 17 to August 21). The integrated logistics sector rose 1.66% this week, with the raw materials supply chain services sector rising 0.72%.

International crude oil prices continue to rise

The 60-day memorandum of understanding between the US and Iran expires on August 17. The US side is not seeking an extension. The two sides have not yet begun a new round of negotiations. Iran says it is discussing a new route through the strait with Oman, but commercial navigation is still restricted. This week, the settlement price of WTI crude oil futures rose from $81.25 to $85.83, an increase of 5.64%, and the average weekly price was $83.78; as of the 17th, only 3 merchant ships passed through the Strait of Hormuz within 24 hours. The UAE adjusted its spot operation strategy. In June and July, the share of crude oil in total exports from the Middle East to Asia rose to 32% and 27% respectively, higher than the previous year's average of about 20%. The forward production capacity is planned to reach 5.2 million b/d by 2027. The market continues to wait and see the geographical situation in the Middle East and the progress of waterway restoration. Some agencies have adjusted their 2026 global crude oil demand expectations, and supply-side uncertainty is still high.

Global winter energy security risks increase

The standoff between the US and Iran over the management of the Strait of Hormuz continues. The US and Iran have made no concessions in the short term; they only rely on indirect communication from Oman and Qatar. More than 80% of the Middle East's LNG capacity has stagnated, Qatar's schedule for resuming production has been repeatedly delayed, and force majeure continues; as of August 15, the EU gas storage level of about 61% was the lowest in 17 years, less than 50% in Germany. According to the current gas injection rate, it only reached 72.2% after 47 days, making it difficult to achieve the 75% winter gas storage target. EU LNG sanctions against Russia came into effect in January 2027. Supply was further tightened, and Asian buyers are purchasing alternative gas sources from Oman, the United States, Nigeria and other countries. LNG supply disturbances have changed from long-term expectations to real risks. Simultaneous European and Asian rush purchases in winter will drive up spot procurement costs, and global energy security risks will rise in winter.

risk analysis

Global trade risks as the Russian-Ukrainian conflict continues to escalate; global macroeconomic recovery falls short of expectations; logistics prices are subject to regulatory changes; and fuel costs have risen sharply.