by HOU Ruining

Mainland China's oil and gas stocks surged on March 2 after international crude prices jumped on escalating tensions in the Middle East.

Brent crude opened 13% higher, briefly climbing to US$82 a barrel before easing to around US$76, up 4.71% as of publication.

The rally followed renewed hostilities involving the United States, Israel and Iran. On February 28, Iran's Islamic Revolutionary Guard Corps said it would bar vessels from passing through the Strait of Hormuz, a key global energy transit route. Xinhua reported on March 1 that an unauthorized tanker attempting to pass through the strait was struck.

About 20% of global oil and liquefied natural gas trade passes through the narrow waterway between Iran and Oman. Market estimates suggest a prolonged disruption could reduce global crude supply by 8 million to 10 million barrels per day.

In Shanghai and Shenzhen, oil and gas shares staged a broad rally.

Sino Geophysical, Tong Petrotech, China Oilfield Services, Zhongman Petroleum and Zhundong Petroleum all hit their daily trading limits. Blue Flame Holding and Geo-Jade Petroleum also surged.

Among heavyweight stocks, PetroChina rose 6.72%, Sinopec gained 2.63%, and CNOOC jumped 9.92%.

Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries, accounting for roughly 3% to 4.5% of global oil supply, with daily output of about 3.3 million barrels. It also produces natural gas from the South Pars field, one of the world’s largest gas reserves.

Analysts are divided over how far prices could climb.

Barclays said Brent could rise to US$100 a barrel if security conditions continue to deteriorate, while UBS warned that expectations of major supply disruptions could push spot prices above US$120.

XI Jiarui, a crude oil analyst at JLC, told Jiemian News that if the conflict escalates, WTI and Brent could quickly rise to US$70 and US$75 per barrel respectively, with potential to break above US$80 depending on developments.

"If hostilities subside quickly and Iran and the United States return to the negotiating table, WTI and Brent would likely trade in the ranges of US$62–66 and US$67–73 per barrel," she said.

Earlier, Morgan Stanley raised its short-term Brent forecast but expects prices to fall back to around US$60 later this year. Goldman Sachs lifted its fourth-quarter 2026 Brent and WTI forecasts by US$6 to US$60 and US$56 per barrel respectively.