The road to peace is getting narrower, while the path to oil prices breaking $200 is widening.

Asking AI · Which assets can become safe havens for investment under the shadow of war?

Editor’s note: The flames of war in the Middle East are striking the world’s most sensitive energy nerves. Behind the sharp fluctuations in international oil prices, expectations of inflation and interest rate volatility are increasing global economic uncertainty, and the cracks in the “oil-dollar” system are accelerating the restructuring of the global energy landscape and financial rules. Tencent Finance has planned the “Energy Explosive Point” series, following the development of the Middle East situation, tracking the impact chain of events, decoding the underlying logic and future trends of energy games. This article is the third installment of the series.

Oil prices soar, stock markets plummet: How can ordinary people protect their money? Wall Street provides an investment survival manual

Text | Zhou Ailin

Editor | Liu Peng

The tension in the Middle East is intensifying. Since Tencent News’s “Periscope” published “Quick victory has become a fantasy, Wall Street begins to ponder: How long can the petrodollar survive?” market sell-offs have intensified, with U.S. stocks first breaking below the 200-day moving average, and last week experiencing a fifth consecutive week of decline, with Asia-Pacific markets also heavily impacted.

Tencent News’s “Periscope” exclusively learned that recently, Bank of America Securities held its 2026 European Energy, Utilities, and Infrastructure Conference in London, where 65 senior executives, analysts, and investors faced a harsh reality in a “fireside chat”: the path to peace is narrowing, while the route to oil prices exceeding $200 per barrel is widening. Even if the U.S. and Iran cease fire, the oil flowing through the Strait of Hormuz can only “recover in drips” rather than “full flow.” At that time, Brent crude oil had already broken through $104 per barrel, and European natural gas soared to €52 per megawatt-hour.

Optimistic investors have partially switched to a “full liquidation” mode, especially considering potential future island seizures and ground troop actions. What else can investors do? In fact, Wall Street investment banks have gradually issued “battle readiness guides” amid the crisis.

The historical stagflation script

The smoke of war in the Middle East has not yet dispersed, and global markets are operating in a way that feels familiar—this script closely overlaps with the 2022 energy crisis and the 1970s oil crises: a simultaneous decline in stocks and bonds, energy stocks standing out, and physical assets resisting declines. But the current decline is far from reaching the magnitude of similar historical events.

Why is this decline less severe? Three reasons: the market does not believe oil prices will stay high long-term; central banks have not yet taken decisive action; economic data has not entered recession territory, with the latest March composite PMI for the Eurozone, UK, and US still in expansion (despite weakening).

However, the intensification of market sell-offs is also because investors are starting to price in the worst-case scenario, as the war is now evolving from a “short-term episode” into a sustained crisis:

⦁ Strait of Hormuz: still closed, about 20% of global oil and gas flows blocked

⦁ Qatar natural gas: about 17% of capacity offline

⦁ Affected regions: Kuwait, Iraq, Saudi Arabia, Qatar, UAE have all shut down some oil fields or refineries

⦁ Countries involved in the conflict: expanded to 10 directly involved nations

⦁ IEA Director Fatih Birol stated: the oil loss from this conflict has exceeded the total of the two oil crises in the 1970s, and natural gas losses are about twice the Russian supply loss to Europe in 2022.

Therefore, it is necessary to review the “historical stagflation script” and the performance patterns of related assets. Deutsche Bank recently mentioned that, in historical stagflation scenarios, four major asset performance patterns generally exist.

Pattern 1: Surge in oil prices is the starting point (already triggered this time)

The transmission mechanism of each stagflation shock begins with a surge in oil prices. From actual prices, Brent crude oil is approaching the peak range of real purchasing power in history.

Pattern 2: Stock markets generally under pressure, energy stocks are the only exception

Source: Tencent Finance. Same below.

Historically, within three months after an oil shock, the S&P 500 has averaged a decline of over 10%, and still remains below pre-shock levels after a year. Currently, the decline in 2026 is significantly less than the historical average, but the direction is fully consistent.

Pattern 3: Government bonds also suffer, but countries with good inflation control are exceptions

In a stagflation environment, investors price in higher inflation and more rate hikes simultaneously, causing government bond prices to fall (yields rise).

Key data for 2026 shows that the market is still underpricing the situation—if the conflict persists, there is room for further bond price declines.

⦁ Historical average: after an oil shock, the 10-year US Treasury yield rises about 100 basis points over 220 days

⦁ Reality in 2026: since the conflict began on February 28, the 10-year US Treasury yield has only risen 42 basis points

A notable finding is that, in the 1970s, countries like Germany and Switzerland, which had better inflation control, saw real returns on government bonds significantly outperform high-inflation countries, providing important reference for bond investors’ allocation choices.

Pattern 4: Physical assets (commodities, real estate) historically perform well—but gold is an outlier in 2026

In previous stagflation shocks, commodities and real estate outperformed inflation. Historically, gold usually surged significantly after oil shocks (average gains over 3 times), but in 2026, gold’s performance deviates sharply from this script—likely because, before the war, gold experienced its fastest annual rise in decades, overextending its safe-haven role, compounded by the resurgence of the dollar and rising rate hike expectations, which also impacted non-yielding assets like gold.

Global energy stocks: who is strong and who is weak

It is worth noting that, although energy stocks are winners in every oil crisis, their performance varies greatly among companies.

Bank of America Securities chief analyst Kuplent reaffirmed the sector preference ranking since the beginning of the year: Oil Services > Major Integrated Oil Companies (Big Oils) > Exploration and Production (E&Ps).

The core logic is that, whether the Strait of Hormuz is “quickly reopened” or “remains closed for months,” both scenarios will increase upstream capital expenditure demand—first due to heightened energy security concerns, second due to urgent repair and restart projects. Therefore, the oil services sector benefits in both scenarios, with the most attractive risk-reward ratio.

Among major oil companies, who is trapped behind the strait, and who is profiting from oil price gains? In terms of exposure, TotalEnergies (TTE) is the most exposed, while Equinor is the safest.

TotalEnergies has the highest exposure to the Strait of Hormuz. However, the company’s board speech specifically pointed out that, although 15% of its production is “trapped” behind the strait, this accounts for only 10% of the group’s operating cash flow—and a Brent oil price average $8 higher per barrel throughout the year can fully offset this loss. In contrast, TotalEnergies’ cash flow resilience to higher oil prices is more robust. Since March, the additional cash flow from rising oil prices has increased by over $25 billion.

Bank of America estimates that since March alone, a $15 per barrel increase in Brent crude, a $7 per megawatt-hour rise in European TTF gas prices, and a $6 per barrel increase in European refining margins have collectively enabled European large oil companies to generate over $25 billion in free cash flow in 2026 (Norway’s Equinor contributing over 20%)—while their combined market value has increased by more than $100 billion in the same period.

Goldman Sachs hedge fund chief Tony Pasquariello also shared an interesting chart in his latest client note—under AI sell-offs and war shocks, Nvidia (NVDA)’s forward P/E has already fallen below that of oil giant ExxonMobil (XOM). This was unimaginable a few years ago.

NVDA vs XOM forward P/E (2021-2026) White line = Nvidia (NVDA) forward P/E Blue line = ExxonMobil (XOM) forward P/E

In early 2021, Nvidia’s P/E soared above 70, at the peak of AI/GPU frenzy; in 2022, it sharply corrected, briefly falling below 30; in 2023, the ChatGPT wave surged again to over 60; in 2024-2025, valuations oscillated downward as markets digested growth expectations; by early 2026, it had fallen to about 23-25, approaching the blue line (XOM).

Meanwhile, the blue line slowly climbs. In 2021-2022, ExxonMobil’s P/E was extremely low (5-8), with no one paying attention to traditional energy; after 2022, amid the energy crisis, company profits surged, and P/E steadily increased with oil price expectations; by early 2026, the forward P/E is about 19.2, approaching Nvidia’s.

Many investment managers told Tencent News “Periscope” that, at present, ExxonMobil’s stock is more of a “bet on oil prices” than a purely good company—if you bet on the war continuing, it is the clearest beneficiary; but if the Strait of Hormuz reopens before June, those who bought around $150 will lose money, showing that oil price fluctuations are key. In 2025, the company’s full-year net profit was $28.8 billion, down 14.4% year-on-year, mainly due to low oil prices dragging down earnings.

Focusing on Asia’s “stagflation winners”

Turning to the recent sharp declines in Asian markets, which themes are expected to remain resilient amid the crisis?

According to Goldman Sachs, based on the performance of industries during historical US/Asia-Pacific quasi-stagflation periods, two special baskets have been constructed—“stagflation winners” and “stagflation losers,” representing the current stock pick whitelist and blacklist.

The so-called stagflation winners mainly refer to stocks that investors can hold steady in the current environment. Selection criteria: leading sectors that outperformed during past stagflation periods, including upstream commodities (oil and gas exploration, metal mining), undervalued financial stocks (banks/insurers), and stable-margin downstream companies (internet media, e-commerce, diversified retail, air freight logistics, essential consumer goods, utilities, healthcare).

Key core holdings include:

⦁ Tencent (700.HK): weight 8%, EBIT profit margin 34.6%, high profit margin stability

⦁ PetroChina H-shares (857.HK): weight 2.7%, directly benefiting from rising oil prices

⦁ BHP Group (BHP.AT): weight 8%, global leader in commodities

⦁ BHP, Rio Tinto, China Hongqiao (aluminum), China Shenhua (coal)

Stagflation losers are undoubtedly targets to avoid. Selection criteria: stocks that underperformed during past stagflation periods, including automotive, consumer services, leisure products, machinery, building materials/construction, electrical equipment, business services, airlines, tech hardware, chemicals, real estate, with low profit margin stability.

Typical losers include:

⦁ Meituan (3690.HK): weight 10%, profit margin near zero, squeezed by high energy costs and consumption downgrade

⦁ Geely Auto (175.HK), Xpeng (9868.HK), Li Auto (2015.HK), NIO (9866.HK): collectively in the auto sector

⦁ Wanhua Chemical, BOE Technology, and other chemical/tech hardware stocks

“Energy Explosive Point” series content

Issue 02 | “Hijacked” Crude Oil: Is Iran Reshaping Global Oil Pricing Power?

Issue 01 | Think Loudly | Xu Qinhua: The US-Iran conflict is essentially a “petrodollar” defense war launched by the US