China News Service Hong Kong, March 31 - Title: High Oil Prices Trigger Chain Reactions, Hong Kong's Economic Layout Seeks Opportunities Amidst Risk Aversion
China News Service Reporter Dai Xiaotong
International oil prices have remained high recently, triggering chain reactions globally. According to the latest performance reports, the three major oil companies in mainland China listed in Hong Kong (referred to as &#34;Three Barrels of Oil&#34;) have impressive results for 2025, attracting attention from the capital market. However, the inflation and interest rate hike expectations brought about by rising oil prices have prompted Hong Kong's real economy to start planning for risk aversion and seeking opportunities.
&#34;Three Barrels of Oil&#34; Stabilize Production to Respond to Oil Price Fluctuations
Since the beginning of 2026, geopolitical conflicts in the Middle East have continued to escalate, disrupting shipping in the Strait of Hormuz and causing international oil prices to rise rapidly.
The &#34;Three Barrels of Oil&#34; recently held a performance briefing in Hong Kong for 2025, stating their strategies to cope with high oil prices. Dai Houliang, Chairman of China National Petroleum Corporation (referred to as &#34;CNPC&#34;), stated that the oil and gas imported through the Strait of Hormuz accounts for about 10% of the total operational volume, and the company has developed and is implementing an emergency plan for trade supply assurance.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O_w7x9vlGBSrw7WIfd765qbtw9DZTZ_eriEl6CzZVUH20AA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O_w7x9vlGBSrw7WIfd765qbtw9DZTZ_eriEl6CzZVUH20AA/641"/>
Dai Houliang, Chairman of CNPC (third from left), stated that the oil and gas imported through the Strait of Hormuz accounts for 10% of the total operational volume. Photo by China News Service reporter Dai Xiaotong
Zhao Dong, Vice Chairman of China Petroleum &amp; Chemical Corporation (referred to as &#34;Sinopec&#34;), stated that based on inventory conditions, crude oil and refined oil inventories have been sufficient in the past two months, and resource assurance for the second quarter is guaranteed, &#34;ensuring refined oil supply is our primary responsibility.&#34;
Mu Xiuping, Senior Vice President of China National Offshore Oil Corporation (referred to as &#34;CNOOC&#34;), pointed out that the rise in oil prices is overall beneficial for the company, and the related benefits will gradually reflect in performance, but the company will not blindly increase production in pursuit of higher prices.
Hong Kong's Economy Faces External Challenges
For Hong Kong's economy, which heavily relies on external inputs, soaring oil prices are bringing real pressure. Oil accounts for about 30% of Hong Kong's energy demand, with oil and gas imports mainly coming from the mainland.
Jiang Jing, an economist at Oversea-Chinese Banking Corporation, stated that the rise in oil prices mainly affects the transportation and public facilities-related industries, leading to an upward revision of this year's Consumer Price Index (CPI) forecast from 1.6% to 1.9%. At the same time, rising costs in shipping and insurance will impact Hong Kong's trade performance, coupled with market risk sentiment being under pressure, which will drag down investment and stock market trading.
Industry insiders pointed out that the impact of high oil prices on Hong Kong is more reflected through indirect channels: first, the slowdown in global trade activities will affect Hong Kong's re-export trade and demand for professional services; second, it will raise expectations for interest rate hikes in the U.S., putting pressure on Hong Kong's interest rates and asset markets under the linked exchange rate system.
UBS pointed out that according to U.S. interest rate futures, the rise in oil prices has led the market to price in a 45% probability of interest rate hikes this year. Although the expected continuous influx of population supports rent growth in Hong Kong, if the Federal Reserve raises interest rates, Hong Kong's residential property prices and real estate stocks will face downward risks, similar to the interest rate hike cycle from April 2022 to August 2023
Advance Layout to Hedge Risks and Seek Opportunities
In response to the complex situation brought about by high oil prices, the Hong Kong Special Administrative Region government is taking measures. The Secretary for the Environment and Ecology, Tse Chin-wan, stated that starting in April, the actual prices of various oil companies and international refined oil prices will be announced weekly, making it easier for the public to monitor whether there are instances of &#34;accelerated increases or decreases&#34; in oil prices.
From the performance of the capital market, the oil and gas sector initially strengthened against the trend at the beginning of the geopolitical conflict. However, as concerns about the sustainability of high oil prices have intensified, market sentiment has shifted. As of the close on March 31, most stocks in the oil and gas sector fell, with PetroChina's share price dropping over 3%. Analysts believe that the market is weighing the boosting effect of high oil prices on oil companies' profits against the drag effect on the macro economy.
CITIC Securities released a research report indicating that if the situation in the Middle East remains tense, long-term supply disruptions could have a significant impact on the refining industry. As the largest downstream operator in Asia, Sinopec may face considerable operational pressure under these circumstances.
In light of the changing situation, the &#34;three oil giants&#34; have indicated that they are accelerating their transformation into comprehensive energy companies. PetroChina has initially established a layout of &#34;oil, gas, thermal, electricity, and hydrogen&#34; and &#34;refining and high-end materials,&#34; with accelerated development of its new energy business; CNOOC's deep-sea floating wind power project is operating stably; Sinopec is speeding up the creation of a comprehensive energy service provider with &#34;oil, gas, hydrogen, electricity, and services,&#34; promoting the transformation of its refining business towards greening, high-end, and intelligent development. (End)

Recent escalation in Middle East conflicts has heightened market concerns over geopolitical risks. At the same time, international oil prices are fluctuating with the situation, impacting the global energy market and overall risk sentiment. Sectors such as energy, shipping, and technology could all face direct impacts.How long do you think the Middle East situation will affect the Hong Kong and U.S. stock markets? Is it a short-term fluctuation or a long-term impact? Feel free to share your thoughts!

Recent escalation in Middle East conflicts has heightened market concerns over geopolitical risks. At the same time, international oil prices are fluctuating with the situation, impacting the global energy market and overall risk sentiment. Sectors such as energy, shipping, and technology could all face direct impacts.How long do you think the Middle East situation will affect the Hong Kong and U.S. stock markets? Is it a short-term fluctuation or a long-term impact? Feel free to share your thoughts!

Escalating tensions in the Middle East—will oil price volatility stir the stock market?

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International oil prices remain high, triggering a chain reaction and putting pressure on Hong Kong's economy. The three major oil companies released their 2025 performance in Hong Kong, emphasizing strategies to cope with oil price fluctuations. PetroChina, Sinopec, and CNOOC all stated that they will ensure oil and gas supply. Economists in Hong Kong predict that rising oil prices will lead to an increase in the consumer price index and affect transportation, public facilities, and trade performance. The indirect impact of high oil prices may drag down investment and stock market trading

(Economic Observer) High Oil Prices Trigger Chain Reactions, Hong Kong's Economic Layout Seeks Opportunities While Hedging Risks