Middle East geopolitical crisis fuels risk aversion sentiment, China Petroleum & Chemical Corporation (Sinopec) shares rise nearly 5%

Caixin February 20 News (Editor: Hu Jiarong) — Due to the sharp escalation of geopolitical risks in the Middle East, Hong Kong oil stocks performed relatively actively.

As of the time of publication, CNOOC International (00346.HK) rose 5%, China Petroleum & Chemical Corporation (00857.HK) increased 4.90%, CNOOC Services (02883.HK) gained 3.92%, and China National Offshore Oil Corporation (00883.HK) rose 3.90%.

Geopolitical Tensions Continue to Escalate

According to reports from relevant media on February 18, the U.S. military has deployed fighters, early warning aircraft, and drones in Jordan, Saudi Arabia, Bahrain, and the UAE, and has assembled several destroyers and near-sea combat ships in the Red Sea, Persian Gulf, and around the Strait of Hormuz. In the North Arabian Sea area, the Abraham Lincoln carrier strike group is in position, and the Ford carrier strike group is expected to arrive by the end of this week.

Meanwhile, satellite images show Iran is reinforcing military and nuclear facilities, and on February 19, Iran and Russia launched joint naval exercises. The commander of the Iranian Islamic Revolutionary Guard Corps Navy explicitly stated that if ordered, Iran can “close the Strait of Hormuz at any time.”

Geopolitical risks are further spilling over. According to relevant media, the Trump administration is evaluating the possibility of limited military strikes against Iran, targeting a few military or government facilities, aiming to pressure Iran into accepting the U.S. conditions for the nuclear agreement. The action could be launched within days, with further escalation depending on subsequent responses.

In response, Iran has sent letters to the UN Secretary-General and the Security Council, emphasizing that it “does not seek war nor provokes it,” but will retaliate if attacked. All facilities related to “hostile forces” in the region are considered legitimate targets. Israeli Prime Minister Netanyahu warned that if Iran retaliates against Israel following U.S. actions, Israel will carry out “unimaginable” retaliation, and has coordinated with the U.S. on military readiness.

Gold and Crude Oil Prices Rise Collectively

It is worth noting that the Strait of Hormuz is a critical shipping route for Middle Eastern oil exports. Due to regional tensions, Iran has previously threatened to close the Strait multiple times. Parts of the waterway are within Iran’s territorial waters, and Iran has also seized commercial ships and oil tankers in the area on suspicion of smuggling.

According to market intelligence firm Kpler, approximately 13 million barrels of crude oil pass through the Strait of Hormuz daily in 2025, accounting for nearly one-third of global seaborne crude oil trade. Therefore, any disruption to this oil flow could quickly impact the global energy markets.

Stimulated by these factors, WTI crude oil futures briefly rose to $66.83 per barrel, and as of the time of publication, increased by 0.33% to $66.62 per barrel.

Risk aversion sentiment has also boosted demand for precious metals. International spot gold briefly broke through $5,000 per ounce and is currently at $4,999.81 per ounce.