— Bloomberg
PETALING JAYA: The direction of oil prices is now dependent on Iran’s response to the US attacks on its nuclear facilities, as any escalation could disrupt global energy markets and potentially trigger a global recession.
According to global reports, the worst-case scenario for the oil market in the near term would be an Iranian attempt to close the Strait of Hormuz.
CGS International (CGSI) Research believes oil prices could rise further if Iran strikes back or maintains an aggressive stance. This is due to the risk of the United States targeting Iran’s shadow tankers or imposing secondary sanctions on buyers of Iranian oil, such as China.
Such actions could threaten Iran’soil exports, estimated at 1.5 to 1.8 million barrels per day (mbpd).
However, CGSI Research believes any price spikes may not last long, as the Organisation of the Petroleum Exporting Countries and its allies (Opec+) would likely respond by ramping up production
The research house views the US$10 rise in Brent crude prices since the start of the war – hitting US$79 per barrel as of June 20 – to perceived risks of future supply disruption rather than any current shortages.
Meanwhile, CIMB Securities Research projects near-term Brent crude prices to reach US$85 per barrel, supported by ongoing supply-side risks.
According to CGSI Research, said as long as the Middle East conflict continues, the share price of pure upstream play Hibiscus Petroleum Bhd
will be the most sensitive to oil price movements, with a strong long-term correlation of 82%.
About 35% of Dialog Group Bhd’s profit after tax and minority interest (Patami) is also linked to its upstream business, although Dialog’s stable midstream earnings help temper this sensitivity.
The research house estimates that every US$5 per barrel rise in oil prices would boost Hibiscus’s financial year 2026 (FY26) Patami by 20%, compared to only a 3% increase for Dialog’s FY6 Patami.
MISC Bhd’s share price has a negative long-term correlation to oil prices, as lower prices from overproduction tend to increase demand for oil transportation services.
CGSI Research continues to favour Dialog as its top pick in the sector, citing its lower risk profile and expanding tank terminal portfolio, maintaining an “overweight” stance on the sector.
CIMB Securities Research highlighted other potential direct beneficiaries of higher oil prices, including Dagang Nexchange Bhd, with producing assets in the UK’s North Sea and Malaysia via Ping Petroleum, and Petra Energy Bhd, which operates the Banang oilfield offshore Terengganu.
As for BIMB Securities Research, its top picks for the sector are MISC, Dialog and Hibiscus. It also favours Malaysia Marine and Heavy Engineering Holdings Bhd and Velesto Energy Bhd.
