International crude oil prices have trended higher with volatility since the start of the year. On February 24th, Brent crude maintained its upward trajectory, trading around $71 per barrel. Professional analysis indicates that geopolitical tensions and short-term supply-demand imbalances highlight the near-term investment value of oil and gas ETFs. From a medium-to-long-term perspective, fundamental factors such as resilient demand and rising costs are also expected to support their long-term investment outlook. So, how can investors capture the long-term opportunities in the oil and gas sector?

Rising geopolitical risks are boosting the risk premium in oil prices. Reports indicate that while a second round of indirect talks between the US and Iran was held on February 17th, before tensions could de-escalate, the US deployed a second aircraft carrier strike group from the Caribbean to the Middle East, simultaneously increasing threats. Concurrently, on February 22nd local time, Russian forces launched large-scale missile and drone attacks in the Kyiv region. The simultaneous escalation of these two major geopolitical hotspots has rapidly translated market concerns about supply disruptions into a risk premium.

Analysis suggests that geopolitical conflicts significantly increase uncertainty regarding crude oil supply. The extent of the impact primarily depends on two key factors: first, whether the conflict involves major global oil producers, and second, whether the conflict poses a substantive threat to key crude oil transportation routes. Iran, in particular, holds a dual strategic role as both an oil producer and a controller of a critical crude oil shipping lane, making it a focal point in oil price volatility and international affairs.

Changes in the supply-demand landscape may drive a structural increase in price levels. The International Energy Agency's February oil market report indicated that on the supply side, global oil supply fell by 1.2 million barrels per day month-on-month in January, affected by escalating geopolitical tensions, North American winter storms and extreme temperatures, and shrinking oil exports from Kazakhstan, Russia, and Venezuela. On the demand side, the agency forecasts global oil demand growth of 850,000 barrels per day for 2026, higher than the 770,000 barrels per day growth in 2025, with petrochemical feedstocks expected to account for over 50% of the demand increase in 2026.

Based on OECD inventories being lower than expected, institutions have raised their oil price forecasts for the fourth quarter of 2026 in recent reports. For the longer term, institutions are optimistic about stronger oil prices in 2027, with core support coming from "robust demand growth and a slowdown in non-OPEC supply growth."

Energy security is becoming a consensus, with strategic demand providing support. In recent years, China has achieved significant results in increasing oil and gas reserves and production. Full-year 2025 crude oil imports reached nearly 578 million tonnes, a year-on-year increase of 4.4%, with December setting a new monthly record high for imports. Professionals note that during the "15th Five-Year Plan" period, China will establish a sound, efficient, and coordinated energy reserve system, deepen international energy cooperation, and strengthen energy security under open conditions. Domestic crude oil imports are expected to maintain growth in the future.

Simultaneously, the US administration plans to refill the US Strategic Petroleum Reserve (SPR) to its maximum capacity. Official data shows that as of January 17th, the reserve held approximately 394.6 million barrels, about 55% of its maximum capacity of 714 million barrels, representing the lowest reserve level since the 1980s. Industry analysts believe that such a large-scale crude oil purchasing program will take a considerable amount of time and has the potential to provide underlying support for oil prices.

Overall, against the backdrop of deglobalization and intensifying geopolitical competition, strengthening energy security appears to have become a consensus among many nations. The strategic replenishment efforts by both China and the US are likely to release substantial purchasing demand over an extended period.

Institutional analysis notes that historically, price increases in precious metals and industrial metals driven by monetary easing cycles have often been accompanied by a recovery in oil prices. With multiple core drivers aligning, the profit potential across the energy industry chain is expected to improve structurally, valuations for resource stocks have room for reassessment, and the investment appeal of upstream assets characterized by high dividends and low costs becomes more pronounced.

For investment vehicle selection, the YinHua Oil & Gas ETF (563150) offers a convenient investment tool. This ETF tracks the CSI Oil & Gas Resources Index (931248.CSI), which selects listed company securities involved in oil and natural gas exploration, services and equipment manufacturing, refining and processing, transportation, and sales. It may help investors diversify single-stock risk and capture the overall market trend of the A-share oil and gas sector.