Recent sanctions imposed by the U.S. and EU on Russia’s top oil firms, Rosneft and Lukoil, have fueled a temporary rebound in crude prices, according to a research report by Guotai Haitong. U.S. Treasury Secretary Besant announced the measures to pressure Russia into an immediate ceasefire with Ukraine. However, the sanctions primarily reflect market sentiment volatility, as the U.S. has yet to specify a timeline for restricting Russian crude, and the EU remains heavily reliant on Russian refined products.

Meanwhile, fresh geopolitical tensions emerged as former U.S. President Trump hinted at potential ground operations against drug cartels and confirmed CIA activities in Venezuela. While these moves signal U.S. efforts to divert domestic pressures and expand influence in South America, further escalation appears unlikely.

Fundamentally, the oil market remains oversupplied. Even if Russia and Venezuela face intermittent supply disruptions, OPEC’s sustained production increases could offset deficits. Reduced Russian crude imports by India and others may reshuffle trade flows but would only temporarily impact demand. Seasonal inventory builds and OPEC’s output hikes continue to weigh on prices.

Investment Recommendations Guotai Haitong highlights two key themes amid intensifying industry competition: anti-internalization and advanced materials. In refining and polyester sectors, it recommends Rongsheng Petrochemical (002493.SZ), Hengli Petrochemical (600346.SH), Tongkun Group (601233.SH), and Xin Feng New Materials (603225.SH). For growth stocks, low-cost coal-to-olefins leader Baofeng Energy (600989.SH) and light hydrocarbon specialist Satellite Chemical (002648.SZ) are favored.

Long-term picks include undervalued, high-dividend plays like CNOOC (600938.SH), PetroChina (601857.SH), ENN Energy (600803.SH), and Kunlun Energy (00135.HK).

Risks include global recession and weaker-than-expected downstream demand.