China Oil and Gas Sector: Revise earnings estimates for Chinese oil majors with oil prices update; valuation and dividend yield attractive

Research evidence excerpt

China Oil and Gas Sector: Revise earnings estimates for Chinese oil majors with oil prices update; valuation and dividend yield attractive

Global Research

8 July 2026ab

China Oil and Gas Sector Equities

AsiaRevise earnings estimates for Chinese oil majors

with oil prices update; valuation and dividend Chemicals

yield attractive AmilyAnalystGuo

amily.guo@ubs.com

+86-105-832 8845

UBS lowers oil price forecasts for 2026/27 Henri Patricot, CFA

Analyst

UBS has recently lowered 2026-27 Brent average forecasts to US$84/US$75/bbl (from henri.patricot@ubs.com

US$93/US$85/bbl), reflecting a potential normalisation of crude flows via Hormuz. Brent +33-14-888 3033

prices fell to the US$70/bbl range recently, a steeper price decline than UBS had

Cheryl Wen

expected. However, with the conflict not fully resolved, crude supply via Hormuz remains

at risk. UBS expects Brent to rebound to an average of US$80/bbl in H226 (see note). S1460525030002

cheryl.wen@ubs.com

Crude: Flip to oversupply in Q426E; restocking demand may support oil prices +86-21-3866 8916

UBS's crude supply demand model points to a supply deficit of 6Mb/d and 0.3Mb/d in Richard Li

Q226/Q326, before reversing to oversupply in Q426. UBS estimates a supply surplus of Analyst

2.9Mb/d and 3.8Mb/d in Q426/2027. However, restocking demand could digest some S1460121090003

of the excess supply, reducing pressure on oil prices—UBS expects global crude richard-ze.li@ubs.com

inventories to drop to 7.5bn bbls by end-June, below the normal range for the past five +86-21-3866 8802

years, before trough at 7.4bn bbls by end-July. Jay LIN

Refining: Still under pressure near-term; likely to stabilise/improve longer-term S1460525070001

With crude prices, and shipping and insurance costs elevated since the start of Q226, jay.lin@ubs.com