The oil and petrochemical sector continued its upward climb today (August 18), with the Huabao Petroleum ETF (159019), designed for a one-stop allocation across the entire oil and gas value chain, displaying robust strength from the market open. Intraday, the fund's on-exchange price hit a high of 1.82%, and as of the time of writing, it was up 0.97%.
Looking at its constituent stocks, Sinopec Oilfield Equipment Corporation hit the daily limit up, while Offshore Oil Engineering Co., Ltd. surged over 8%. Shuifa Gas Co., Ltd., Sinopec Oilfield Service Corporation, and midstream engineering firms all advanced more than 4%. Tongyuan Petroleum Technology Co., Ltd. and Guizhou Gas Group Corporation Ltd. were also among the notable gainers.
On the news front, expectations for a US-Iran deal have cooled significantly. The US has signaled a preference for applying pressure through a naval blockade and financial sanctions, indicating no immediate intention to reach a comprehensive agreement. Meanwhile, Iran has stated that the Strait will not fully reopen unless the blockade is lifted, and that any passage must adhere to its control arrangements. This has essentially dashed hopes for an imminent diplomatic resolution.
Adding further fuel to the fire, an UAE-linked tanker was attacked in the Strait, and a Russian Black Sea loading terminal was also briefly disrupted by a strike. Persistent harassment by the Houthis in the Red Sea region continues to stimulate upward pressure on oil prices.
Where to start with the investment landscape
CSC Financial points out that looking ahead to the second half of the year, the US-Iran conflict is likely to become a protracted standoff. While Middle East supply repairs and floating storage drawdowns occur, limited demand recovery elasticity and regional low inventories will create a tug-of-war, likely pushing oil prices into a wide-ranging consolidation phase.
What makes the sector attractive
Shanxi Securities suggests that the "Three Barrels" of Chinese oil majors boast strong defensive attributes with low valuations. Their stable cash flows, high dividend yields, and abundant oil and gas reserves provide significant defensive value. In contrast, private refining and chemical companies generally trade at higher valuation multiples than the state-owned giants, with valuations fluctuating significantly alongside industry cycles. As China's oil prices experience volatility, their profitability is gradually improving, potentially setting the stage for both earnings growth and valuation re-rating.
For investors seeking a one-stop allocation across the entire oil and gas value chain to capture the dividend of the energy security era, the Huabao Petroleum ETF (159019) deserves close attention. This fund tracks the Guozheng Petroleum and Natural Gas Index, providing exposure to 50 A-share companies spanning oil and gas exploration and development, oilfield equipment and services, and gas transmission and sales. The "Three Barrels" account for nearly 40% of the index weight.
Note: Fees are detailed in the fund's legal documents. Source: Shanghai and Shenzhen Stock Exchanges, etc., as of August 18, 2026.
Reminder: Market volatility may be significant in the near term, and short-term gains or losses do not predict future performance. Investors must make rational decisions based on their own capital situation and risk tolerance, paying close attention to position and risk management.
Risk Warning: The Huabao Petroleum ETF passively tracks the Guozheng Petroleum and Natural Gas Index, with a base date of December 31, 2002, and a release date of December 30, 2014. The index's constituent stocks are adjusted periodically according to its compilation rules, and backtested historical performance does not indicate future index performance. The stocks mentioned in this article are only objective displays of index constituents and do not constitute any stock recommendation, nor do they represent the fund manager's or the fund's investment direction. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors are solely responsible for their own independent investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers in any form, nor do they bear any responsibility for direct or indirect losses arising from the use of this content. Investors should carefully read the Fund Contract, Prospectus, Fund Product Information Summary, and other fund legal documents to understand the fund's risk-return characteristics and choose products that match their own risk tolerance. Past performance of the fund does not indicate future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. According to the fund manager's assessment, the risk level of the Huabao Petroleum ETF is R3-Medium Risk, suitable for investors with a Balanced (C3) profile or above. The suitability matching opinion is subject to the sales institution's confirmation. Sales institutions (including the fund manager's direct sales and other sales institutions) conduct risk assessments on the above funds according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various sales institutions are not necessarily consistent, and the risk level ratings of fund products issued by fund sales institutions shall not be lower than the risk level ratings made by the fund manager. The risk-return characteristics and risk levels described in the fund contract may differ due to different considerations. Investors should understand the fund's risk-return profile and carefully choose fund products based on their own investment objectives, horizon, experience, and risk tolerance, bearing the risks themselves. The registration of the above fund by the China Securities Regulatory Commission does not indicate that it has made a substantive judgment or guarantee on the fund's investment value, market prospects, or returns. Investors should invest cautiously.