The gas utilities sector became one of the most eye-catching segments of the A-share market on September 10, with a wave of buying sweeping through the space shortly after the opening bell. 水发燃气 hit its daily limit-up straight away, while a host of other gas names including 凯添燃气, 贵州燃气, 美能能源, 天壕能源, 新疆火炬 and 首华燃气 followed suit with solid gains, lifting the broader oil and gas complex.
The spark that ignited this rally came from the international crude market. On the evening of September 9, Brent crude futures broke decisively above the $100-per-barrel mark during intraday trading — the first time since July 24 — with daily gains at one point exceeding 2% and year-to-date appreciation now topping 103%.
The trigger for the sharp oil price spike was a dramatic escalation in Middle East tensions. On September 8, U.S. military forces destroyed five Iranian crude transport vessels. Iran's Islamic Revolutionary Guard Corps responded with a statement declaring it had carried out retaliatory strikes against U.S. warships and oil tankers in the Persian Gulf region, inflicting heavy damage. Meanwhile, Yemen's Houthi rebels attacked four cities in southern Saudi Arabia, setting oil facilities ablaze and significantly escalating a conflict that had already been running for six months.
The ripple effect from higher oil prices spread quickly into the natural gas market. During European trading hours on September 9, the Dutch TTF gas futures benchmark — Europe's reference price — jumped nearly 4% to €78.80 per megawatt-hour, the highest level since early January 2023. Even more notably, European gas futures pushed through the €80/MWh threshold overnight for the first time in three years, sending international gas prices back to their highest levels in nearly three years.
Crude oil and natural gas share an inherent pricing linkage in the global energy system. Rising oil prices not only boost substitution demand for LNG spot cargoes, but also directly lift the landed cost of gas through channels such as freight rates and liquefaction expenses. On the Shanghai International Energy Exchange, the main crude futures contract surged 9% to 787.8 yuan per barrel, while the fuel oil main contract jumped 6% to 4,175 yuan per tonne, further reinforcing market expectations of broad-based energy price increases.
The increasingly tight supply-demand dynamics in natural gas itself are also underpinning the sector's strength. From a global perspective, geopolitical conflict is systematically compressing the supply elasticity of gas. Analysts at 东吴证券 point out that a closure of the Strait of Hormuz would directly affect roughly 3% of Europe's gas supply, with the impact on Asian and European gas prices being particularly pronounced. As of September 4, the Asian spot benchmark JKM and Europe's TTF had risen 119% and 114% respectively compared with pre-conflict levels.
On the other side of the supply contraction is Europe's dwindling storage position. Current European gas inventories stand at approximately 724 terawatt-hours, about 149 TWh lower than the same period last year, with storage fill rates at only around 64% — down roughly 12.8 percentage points year-on-year. 天风证券 further notes that a full closure of the Strait of Hormuz could reduce global gas supply by about 20%, while incremental capacity from U.S. export terminals remains limited. If a colder-than-usual winter further depletes inventories, global gas prices could face a second leg higher.
The pressure from import costs is already visible in the data. In July 2026, China's average import price for liquefied natural gas reached 4,816 yuan per tonne, up 9.6% month-on-month and a sharp 27.2% higher year-on-year. The overall natural gas import price averaged 3,671 yuan per tonne, up 6.4% from the previous month and 15.1% higher year-on-year. Domestic LNG landed prices have now climbed to roughly $25.5 per million British thermal units, more than double their level a year ago. This means domestic city-gas operators and industrial users will face intensifying procurement cost pressure in the coming months, while companies with access to their own gas sources or long-term overseas supply agreements are well positioned to build a competitive edge in cost control.
Indeed, the improvement in the gas industry's fundamentals is already showing up in financial results. Statistics show that in the second quarter of 2026, the gas sector's aggregate net profit attributable to shareholders grew 19% year-on-year, primarily driven by higher gas prices. With natural gas prices remaining elevated, upstream gas producers should see their profitability continue to improve.
The core logic driving bullish sentiment on gas stocks rests on three pillars: geopolitical risk pushing the international gas price centre higher, import cost pass-through accelerating the implementation of price-adjustment mechanisms, and an initial confirmation of an earnings inflection point for the industry. That said, geopolitical developments have always been fraught with uncertainty, and the suppressive effect of high gas prices on downstream demand should not be overlooked. For investors, while the sector's upside potential is clearly on display, it is more important than ever to identify which companies genuinely possess resource advantages and cost moats. After all, in the major cycles of energy prices, it is always those who hold hard assets that manage to weather the volatility.