Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the Federal Reserve's monetary policy in response to oil price shocks and its implications for the U.S. economy and financial markets. Core Insights and Arguments - **Federal Reserve's Stance**: The Fed is expected to maintain its current interest rate policy, with a target range for the federal funds rate at 3.50% to 3.75% and a bias towards potential rate cuts in the future [6][11][12]. - **Inflation Projections**: Higher oil prices are anticipated to increase headline inflation forecasts, with the median member projecting a rise in 2026 PCE inflation to 2.7%, up from 2.4% [26]. However, core PCE inflation is expected to rise only slightly to 2.6% [26]. - **Response to Oil Price Shocks**: The Fed is likely to "look through" temporary increases in headline inflation caused by oil price shocks, maintaining a focus on underlying economic conditions [28][31]. The historical context suggests that the Fed has successfully managed similar situations in the past without resorting to rate hikes [33][36]. - **Labor Market Concerns**: The weak February employment report, which showed a loss of 92,000 jobs, raises concerns about the stability of the labor market and may influence the Fed's decision-making process [15][56]. Additional Important Content - **Market Reactions**: The market has adjusted its expectations for the Fed's policy, with the probability of remaining on hold throughout 2026 rising to 43% from 17% [57]. This reflects a significant shift in investor sentiment regarding future rate cuts. - **Geopolitical Factors**: The ongoing conflict in Iran is influencing market dynamics, particularly in relation to oil prices and Treasury yields [43][50]. The Fed's response to these geopolitical risks will be crucial in shaping monetary policy. - **Regulatory Changes**: Upcoming changes to Basel III regulations and the G-SIB surcharge are expected to impact bank financing and investment strategies, with implications for agency MBS and corporate credit [64][65][86]. Conclusion - The Federal Reserve's approach to managing inflation and economic growth amidst rising oil prices will be critical in the coming months. Investors should closely monitor labor market data and geopolitical developments, as these factors will significantly influence monetary policy and market conditions.

Summary of the Conference Call on Oil Flows through the Strait of Hormuz Industry Overview - The report focuses on the oil industry, specifically the oil flows through the Strait of Hormuz (SoH) and the implications of geopolitical tensions in the region. Key Points and Arguments - **Current Oil Flow Estimates**: Estimated oil flows through the Strait of Hormuz have decreased by 19.5 million barrels per day (mb/d) to only 0.5 mb/d based on a 4-day moving average [1] - **Total Impact on Oil Flows**: The total estimated hit to oil flows from the Persian Gulf, after accounting for pipeline redirection, stands at 17.2 mb/d, which is significantly larger than the peak impact on Russian oil production in April 2022 [8] - **Vessel Tracking Challenges**: Tracking vessels remains difficult, but preliminary data indicates no oil tankers crossed the Strait on March 12 [1] - **Iran's Actions**: Reports indicate that Iran has allowed two India-flagged Liquefied Petroleum Gas (LPG) carriers to cross the Strait, with one tanker under escort from the Indian Navy [1] - **Potential Recovery Paths**: Three theoretical paths for a recovery in Hormuz flows were outlined: 1. Iran allowing safe passage for tankers with specific origins/destinations (e.g., China, India) 2. General de-escalation of conflict 3. Strong naval protection for tankers [1] - **Risks to Recovery Assumptions**: The risks to the assumption of a gradual recovery from March 21 are skewed towards delays, with recent reports suggesting Iran is granting pass-through authorizations to selective tankers [1] - **Attacks on Tankers**: There have been 17 reported attacks on oil tankers, but no confirmed attacks on Asian-flagged tankers, which accounted for nearly 60% of Hormuz tanker transits in the second half of 2025 [11][14] - **Asian Tanker Dominance**: Asia-bound tankers represented around 95% of the transits through the Strait of Hormuz in the second half of 2025 [14] - **Medium-Term Price Impact**: The medium-term impact of the Hormuz shock on oil prices will largely depend on total Persian Gulf exports to the rest of the world rather than specific regional exports, as oil is largely fungible and can be re-routed [1] Other Important Information - **Data Sources**: The report references data from S&P Global Commodities at Sea and Bloomberg, indicating a reliance on multiple data sources for accuracy [4][10] - **Exhibits**: Several exhibits are included to illustrate the data, including vessel counts and the impact of attacks on oil tankers [3][5][11][14] This summary encapsulates the critical insights and data points from the conference call regarding the current state of oil flows through the Strait of Hormuz and the broader implications for the oil industry.

Flash | Tailwinds – PRC utilities & renewable sector companies likely to see tailwinds from higher Oil & LNG prices in our view include: (i) Upstream gas company ENN Natural Gas – it deals with upstream direct gas sales. It has secured a large amount of LNG supply via take-or-pay contracts at relatively steady unit costs. Moreover, it sells this LNG at spot prices or via forward contracts. 13 Mar 2026 12:44:20 ET │ 10 pages China Renewables & Utility Sector Headwinds & Tailwinds from Higher Oil & LNG Prices ...

Investment Rating - The report suggests a cautious approach towards oil prices above $100 per barrel and indicates potential risks in various sectors if certain economic thresholds are breached [4][18]. Core Insights - The report highlights the tightening financial conditions due to rising oil prices and the implications for stock earnings, emphasizing that the biggest risk for stocks is earnings per share (EPS) rather than consumer price index (CPI) [3][19]. - It draws parallels between current market conditions and the 2007-2008 financial crisis, suggesting that the probability of a European Central Bank (ECB) rate hike by June 2026 is now at 75% [2][19]. - The report indicates that positioning remains more bullish than bearish, despite visible outflows from high-yield bonds and emerging market debt, suggesting that a "bear panic" has not yet occurred [15][18]. Summary by Sections Market Flows - Recent market flows show $13.2 billion inflow to stocks, $3.4 billion to bonds, and significant outflows from high-yield bonds and emerging market debt [11][49]. - Private clients have shown a preference for Japan and emerging market debt, with notable inflows into municipal bonds [13][50]. Economic Indicators - The BofA Bull & Bear Indicator has decreased to 8.7 from 9.2, indicating a shift in market sentiment with outflows from technology and healthcare sectors [10][15]. - The report notes that the current economic environment is characterized by high oil prices and tightening credit conditions, which could lead to a significant market correction if not addressed [4][19]. Investment Strategies - Suggested strategies include fading oil prices above $100 per barrel and focusing on safe-haven assets such as Treasuries and consumer stocks, particularly in the context of potential stagflation [4][22]. - The report emphasizes the importance of monitoring liquidity conditions and credit risks, as these factors could signal a shift in market dynamics [14][19].

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the oil industry, focusing on the current situation in the Strait of Hormuz and its impact on oil prices and production levels [1][3][10]. Core Insights and Arguments - **Oil Price Volatility**: Oil prices are highly volatile, fluctuating between $84 and $117 per barrel, with a current price around $93 as geopolitical tensions escalate [1]. - **Production Disruptions**: Approximately 6-7 million barrels per day (b/d) of oil production have been shut in due to disruptions in the Strait of Hormuz, which is currently experiencing a blockage of over 90% [1][9][10]. - **IEA Emergency Release**: The International Energy Agency (IEA) has announced a record emergency release of 400 million barrels of oil, which could cover four weeks of disrupted flows from the Strait [1][14]. - **Potential Drawdown Rates**: The IEA's theoretical maximum drawdown rate could reach 24 million b/d for a month, although historically observed rates are much lower, typically around 2 million b/d [1][17]. - **Geopolitical Risks**: There is a significant risk of escalation in the region, which could lead to attacks on energy infrastructure, reminiscent of oil shocks from the 1970s [5]. Additional Important Content - **US and G7 Response**: The US and G7 countries are coordinating to provide safety valves for the oil market, including the IEA's strategic stock release [3][20]. - **Regional Production Cuts**: Gulf producers, including Saudi Arabia, Iraq, Kuwait, and the UAE, have progressively reduced oil production due to export constraints [10]. - **Indian and Chinese Market Dynamics**: India is expected to increase its purchases of Russian oil, while China may reduce its stockpiling activities, which could provide further relief to the oil market [11][23]. - **US Oil Inventory Changes**: US commercial crude oil inventories rose by 3.8 million barrels, while gasoline and diesel stocks fell, indicating a complex supply-demand dynamic [24][26][27]. - **Price Forecast Adjustments**: The oil price forecasts for 1Q, 2Q, and 3Q 2026 have been revised upwards, with a baseline price range of $80-100 per barrel expected in the coming weeks [12][20]. This summary encapsulates the critical points discussed in the conference call, highlighting the current state of the oil industry, geopolitical influences, and market responses.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the oil industry, specifically the impact of disruptions in the Strait of Hormuz on oil prices and supply dynamics. Core Insights and Arguments - **Longer Disruption Assumption**: The price forecast has been upgraded due to an assumption of 21 days of low oil flows from the Strait of Hormuz at 10% of normal levels, followed by a 30-day gradual recovery [2][5] - **Estimated Impact on Exports**: The estimated hit to Persian Gulf oil exports is 16.2 million barrels per day (mb/d) based on a 4-day moving average [7] - **Price Forecasts**: The forecast for Brent and WTI prices in Q4 2026 has been adjusted to $71 and $67 respectively, up from $66 and $62 [10][24] - **Risk Premium**: A large risk premium is expected due to uncertainty surrounding the duration of the supply shock, which is the largest on record [12][28] - **Policy Response**: Global policy measures, including Strategic Petroleum Reserve (SPR) releases, are estimated to reduce the impact on global oil inventories by nearly 50%, from 617 million barrels (mb) to 332 mb [18] - **Price Scenarios**: In a 30-day disruption scenario, Brent and WTI prices could average $76 and $72, respectively, while in a 60-day scenario, prices could rise to $93 and $89 [3][22] Additional Important Insights - **Two-Sided Risks**: The risks to the price forecast are two-sided but skewed to the upside, with potential for prices to exceed the 2008 peak if disruptions persist [28] - **Market Dynamics**: The market may require demand destruction to hedge against falling inventories, which could temporarily lift prices above $100 during disruptions [22] - **Geopolitical Factors**: The U.S. Administration's military actions could significantly influence the risk premium in oil prices, with a potential sharp reduction if military actions cease [28] This summary encapsulates the critical insights and forecasts regarding the oil industry as discussed in the conference call, highlighting the implications of geopolitical disruptions on oil prices and supply.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the oil industry, focusing on the current situation in the Strait of Hormuz and its impact on oil prices and production levels [1][3][20]. Core Insights and Arguments - **Oil Price Volatility**: Oil prices are highly volatile, fluctuating between $84 and $117 per barrel, with a current price around $93. The ongoing US/Israel-Iran conflict has led to significant disruptions in oil production, with approximately 6-7 million barrels per day (b/d) of output shut in [1][2]. - **IEA Emergency Stock Release**: The International Energy Agency (IEA) has announced a record emergency release of 400 million barrels (m bbls) of oil, which is expected to cover four weeks of disrupted flows from the Strait of Hormuz. This is the largest release in history [1][14][16]. - **Production Cuts**: Gulf producers, including Saudi Arabia, Iraq, Kuwait, and the UAE, have progressively shut in oil production due to constraints in exports caused by the Strait's closure. Saudi Arabia has shut offshore fields supplying 2.0-2.5 m b/d, while Iraq's output has dropped from 4.4 m b/d to 1.2-1.3 m b/d [10][11]. - **Potential for Further Disruption**: The risk of attacks on regional energy infrastructure remains elevated, which could lead to significant oil price shocks reminiscent of the 1970s. The situation is sensitive to potential regime changes or escalations in military conflict [5][20]. Additional Important Information - **US and G7 Response**: The US and G7 countries are working to provide safety valves for the oil market, including the IEA's emergency stock release. Japan is also set to release 80 m bbls from its stocks [3][14]. - **Drawdown Rates**: Historical drawdown rates from emergency stocks have been significantly lower than the theoretical maximum of 24 m b/d suggested by the IEA. Actual observed rates have been closer to 2 m b/d [17][21]. - **US Oil Inventories**: Recent data shows a rise in US commercial crude oil inventories by 3.8 m bbls, while gasoline and diesel stocks have fallen. The US Strategic Petroleum Reserve (SPR) stands at 415.4 m bbls, which is below pre-2022 levels [24][25][26]. - **Market Outlook**: The IEA's commitment to provide liquidity is crucial for managing oil price increases. The expected price range for Brent crude over the next 1-2 weeks is $80-100 per barrel, reflecting the ongoing military conflict and market dynamics [20][12]. This summary encapsulates the critical points discussed in the conference call, highlighting the current state of the oil industry, the implications of geopolitical tensions, and the responses from major stakeholders.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the oil industry, specifically the disruptions in oil flows through the Strait of Hormuz due to geopolitical tensions in the region [3][4][5]. Core Insights and Arguments - **Decline in Oil Flows**: Estimated oil flows through the Strait of Hormuz have decreased by 19.4 million barrels per day (mb/d) to 0.6 mb/d, based on a 4-day moving average [3][8]. - **Persian Gulf Exports**: The net impact on Persian Gulf exports is estimated at 15.4 mb/d, with some redirection of flows via ports in Yanbu and Fujairah increasing to 4.0 mb/d [3][9]. - **Production Shut-ins**: Middle East crude production shut-ins are averaging 6.3 mb/d, with a full ramp-up expected within 4 weeks after reopening. Refinery outages are estimated at 1.7 mb/d [3][17][26]. - **Price Dynamics**: Asian jet fuel prices have doubled since February 27, indicating significant spot refined product tightness. The Brent-Murban differential has fallen to -$20 per barrel as buyers seek Murban crude outside the Strait of Hormuz [3][35][43]. - **Market Expectations**: Futures markets are pricing in a shorter expected duration of disruptions, with Brent prices moderating from nearly $120 to just under $90 [3][4]. Additional Important Insights - **Risks to Oil Tankers**: The physical risks for oil tankers in the Middle East remain elevated, with reports of attacks on vessels [15][61]. - **Inventory Buffers**: Asian countries, particularly Japan and China, have over 100 days of visible oil stocks in terms of days of demand, which may mitigate immediate supply concerns [22][23]. - **Market Sentiment**: The probability of the conflict ending by March has increased to 30%, with various stakeholders expressing differing views on the timeline for resolution [4][30]. - **Freight Rates**: Oil tanker freight rates have surged, with Middle Eastern freight rates increasing by $10 per barrel since the onset of the conflict [55]. This summary encapsulates the critical points discussed in the conference call, highlighting the current state of the oil industry amidst geopolitical tensions and the implications for market dynamics.

Summary of Key Points from the Conference Call Industry and Company Overview - The report focuses on the Chinese equity market, particularly the performance of offshore and A shares amid geopolitical tensions, energy price fluctuations, and advancements in AI technology [1][2][19]. Core Insights and Arguments 1. **Geopolitical Tensions and Market Performance**: - Global equity prices are influenced by heightened geopolitical tensions in the Middle East, leading to a 12% pullback in offshore China equities (MSCI China) from January highs, while A shares (CSI300) remain flat year-to-date [1][2]. 2. **Oil Price Sensitivity**: - China is less sensitive to oil price shocks compared to its emerging market peers. Brent crude oil prices have risen over 50% year-to-date, surpassing $100 per barrel, which could lead to a 0.2 percentage point increase in inflation and a 0.1 percentage point reduction in real GDP growth over the next four quarters [4][8]. 3. **Earnings and Valuation Outlook**: - The earnings growth for offshore-listed stocks is expected to be low-single-digit for FY25, with a potential acceleration to around 14% in FY26 driven by AI, "Going Global," and anti-involution policies [22][26]. - Current valuations already reflect moderate downside growth risks, with a hypothetical scenario indicating a 20% decline in fair value if stagflation occurs [12][19]. 4. **Two Sessions Policy Signals**: - The Chinese government has set a real GDP growth target of 4.5-5% for the year, emphasizing quality over quantity. Fiscal policy is expected to remain expansionary, with a focus on strategic sectors [19][21]. 5. **Investor Sentiment**: - Interest in Chinese equities has increased, with a significant drop in the perception of China equity as "uninvestable" from 40% to 10% among international investors over two years. However, actual allocations remain conservative, with global mutual funds underweighting Chinese equities by approximately 300 basis points [25][28]. 6. **AI Investment Theme**: - AI is a major investment theme, with China accounting for 10% of the global AI market cap but significantly underrepresented in global mutual fund allocations. The potential economic benefits from AI are estimated to be 50% to 100% higher than currently reflected in equity prices [32][35]. 7. **HALO Investment Strategy**: - The "HALO" strategy focuses on investing in sectors with heavy assets and low obsolescence, such as Materials and Utilities, as a response to AI disruptions in asset-light industries [37][39]. 8. **A Shares vs. H Shares**: - A shares are expected to continue outperforming H shares in the near term due to better earnings momentum and lower beta to global equities. The A-H Market Rotation Model suggests potential outperformance of H shares in the following months, but current conditions favor A shares [45][46]. Other Important Insights - The report highlights the importance of monitoring geopolitical developments and their impact on market sentiment and valuations [12][19]. - The analysis indicates that sectors related to technology, cyclical industries, and consumer goods are likely to receive policy support in the near future [21][23]. - The upcoming earnings season is anticipated to provide further insights into the divergence in earnings growth between A and H shares [22]. This comprehensive overview captures the essential themes and insights from the conference call, providing a detailed understanding of the current state and outlook for the Chinese equity market.

9 March 2026 | 10:32PM EDT Commodities Research Oil Comment: Hormuz Price Scenarios Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com Goldman Sachs & Co. LLC Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. c45a43530f604d12bcb9a82b5aa6b9f6 n St ...