Iran and Israel Trade Strikes on Oil and Gas Facilities, Triggering Supply Cut Panic; Shandong Molong Surges Nearly 14% Leading Related Stocks

Caixin March 19 News (Editor: Hu Jiarong) The sudden escalation of tensions in the Middle East has quickly transmitted to the capital markets, triggering a rally in oil and oil equipment-related stocks.

In the Hong Kong stock market, oil and gas equipment stocks performed particularly well. As of the time of writing, Shandong Molong (00568.HK) rose 13.77%, Baijinqi Oil Services (02178.HK) increased 11.54%, and Sinopec Oilfield Service (01033.HK) gained 5.05%.

Meanwhile, oil stocks also resonated. As of the time of writing, MI Energy (01555.HK) surged 19.44%, Yanchang Petroleum International (00346.HK) increased 8.24%, and China National Offshore Oil Corporation (00883.HK) rose 4.88%.

The core of this round of crisis lies in a fundamental shift in the nature of the conflict. The confrontation between Israel and Iran has escalated from localized friction to direct strikes on each other’s key oil and gas targets. According to reports, Israel, coordinated with the U.S., launched a surprise attack on facilities related to the South Pars gas field, which accounts for about 40% of Iran’s natural gas production. In retaliation, Iran announced it would intensify attacks on U.S. oil facilities and designated energy infrastructure in Saudi Arabia, the UAE, and Qatar as legitimate targets.

The market reacted strongly, quickly reassessing the timeline of the conflict. Investors generally worry that this conflict could develop into a prolonged war lasting several months, potentially replaying the 2022 global energy supply shock scenario.

Supply disruption fears are reshaping the supply-demand landscape, with a high probability of oil prices rising

Affected by geopolitical risk premiums and expectations of actual supply disruptions, the crude oil market experienced intense volatility. On Thursday morning, WTI crude futures surged over 2.60%, with the latest price reaching $97.94 per barrel.

The current logic supporting the rise in oil prices mainly comes from two aspects:

Preventive oil stockpiling demand: Countries are proactively stockpiling oil to guard against potential supply disruptions, directly boosting short-term demand.

Reversal of supply-demand structure risk: The current price increase has not fully priced in extreme risks. If key shipping routes remain blocked for several weeks, nearly 20 million barrels per day of global transportation could be interrupted. This would cause the global crude oil market to rapidly shift from “surplus” to “shortage,” making further price increases highly likely.

White House issues emergency waiver of the Jones Act to unblock domestic energy arteries

In response to soaring energy prices, the U.S. government quickly implemented emergency measures. On March 18, President Trump signed an executive order temporarily waiving the century-old Jones Act. Enacted in 1920, the law strictly requires that goods transported between U.S. ports must be carried on ships flying the U.S. flag, built in the U.S., and owned by U.S. companies.

This waiver covers coal, crude oil, refined oil products, natural gas, liquefied natural gas, fertilizers, and other energy derivatives. It mainly allows foreign-flag ships to carry these bulk commodities between U.S. domestic ports, aiming to alleviate logistical bottlenecks for crude oil shipments from the Gulf Coast to East Coast refineries, reduce transportation costs, and ease price pressures in the Northeast refined oil market.