International crude oil prices have staged a powerful rally in recent sessions, with U.S. crude and Brent crude both jumping more than 5% on October 8, while European diesel prices also climbed sharply. A combination of multiple geopolitical disruptions, low refined product inventories, front-loaded winter heating demand, and an IMF warning that elevated oil prices could persist until 2027 has established a tightly balanced energy market. Against a backdrop where high U.S. Treasury yields are weighing on growth stocks, the A-share energy sector is standing out with its unique defensive and elastic advantages thanks to cyclical prosperity and policy support.

Multiple Bullish Factors Converge, Locking In a High Oil Price Regime

The current oil price rally is primarily driven by both geopolitical logistics and supply-demand fundamentals. Conflicts are escalating across multiple Middle Eastern regions, shipping risks in the Strait of Hormuz and the Red Sea are surging, and shipping costs along with supply disruption risk premiums continue to rise. At the same time, refined product inventories in Europe and the U.S. are significantly low, Europe's diesel supply gap is difficult to repair, and winter heating demand in the Northern Hemisphere is being released earlier than usual. Notably, the IEA's reserve releases have been limited in scale with insufficient substantive additions, producing only a weak market-boosting effect. Combined with refining capacity bottlenecks that have no short-term solution, institutions including Goldman Sachs and the IMF predict that refined product price spreads will remain elevated for years to come, and the energy supply crunch will be difficult to reverse quickly.

15th Five-Year Plan Policy Empowers the Energy Track, Reshaping Value

Supported by the 15th Five-Year Plan energy strategy, the A-share energy track is breaking away from traditional cyclical logic and ushering in long-term policy dividends. The plan clearly defines core directions including stabilizing and increasing oil and gas production, reducing oil consumption while increasing chemical conversion, and ensuring energy security, driving refinery transformation and upgrading as well as continued increases in industry concentration. Upstream oil and gas exploration and oilfield service equipment tracks are benefiting from deepwater and shale oil technology breakthroughs and expanded capital expenditure; integrated refining and chemical leaders are relying on high-end material transformation, with profit resilience becoming more prominent; and segments such as LNG substitution and oil and gas pipeline storage and transportation are also seeing sustained demand growth.

Market Style Shift Amplifies Energy's Defensive Attributes

With long-end U.S. Treasury yields running at high levels and global liquidity tightening, high-valuation growth stocks in AI and new energy are under continued pressure, and risk-aversion preferences are heating up. The energy sector, by contrast, is a short-duration asset with high prosperity, high dividends, and stable cash flow characteristics. Meanwhile, sectors such as aviation, logistics, and downstream chemicals continue to face cost pressure from rising oil prices, with profit recovery under strain, making the market's structural divergence increasingly evident.

Overall Perspective

Geopolitical disruptions and a tightly balanced supply-demand picture are locking in medium-to-long-term high oil prices, while 15th Five-Year Plan energy policies continue to release dividends, creating a dual benefit of cyclical prosperity and policy empowerment for the A-share oil and petrochemical sector. Against the current backdrop of valuation divergence and pressure on growth stocks, the energy sector combines both defensive qualities and growth elasticity, with its medium-to-long-term track value continuing to stand out.