PETALING JAYA: Every US$10 increase in Brent crude oil prices per barrel could lift Hibiscus Petroleum Bhd
’s share price by about 34 sen, estimates Hong Leong Investment Bank (HLIB) Research.
The research house has a target price of RM2.74 for Hibiscus, compared to the share price of RM2.13 as at press time. It also maintained its “buy” call on the stock.
Given Hibiscus’ pure upstream exposure, HLIB Research believes the group is well-positioned to benefit from the ongoing Iran war, with realised prices directly benchmarked to the weekly average Brent at the point of offtake.
“We view Hibiscus the key beneficiary in this high oil price environment, offering the most direct exposure under our coverage,” it pointed out after attending Hibiscus’ Investor Engagement Day recently.
As such, higher Brent prices should translate into stronger realised prices on lifted volumes, driving meaningful earnings growth, it said.
While Hibiscus started the first half of financial year 2026 (1H26) on a softer footing due to muted crude lifting across PM3 CAA, Anasuria and Kinabalu, mainly impacted by maintenance activities and temporary shutdowns, HLIB Research said it gathered that operations have since normalised.
“Hibiscus is planning to accelerate production should elevated oil prices persist, positioning itself to capture the near-term upside.
“We observed that Hibiscus typically realises a premium of 7%-9% to Brent prices, which management guides could expand to 13%-18% at US$90-US$100 per barrel levels.
“We expect a recovery in 2H26, supported by higher offtake volumes and stronger realised oil prices, which should drive sequential earnings improvement.”
HLIB Research has raised its Brent price assumption by nearly 29% for 2026 to US$90 per barrel. With this, it raised its dividend per share forecast for FY26 to 10 sen from seven sen, aligned with Hibiscus’ guidance.
A fund manager told StarBiz that Hibiscus is expected to post stronger earnings than previously expected, as the upstream player would directly benefit from higher oil prices.
“Brent price is now around US$95 level per barrel, compared to over US$60 when this year started.
“Prices will be elevated as long as oil production does not increase to what it used to be,” the fund manager said.
Using data by Rystad Energy, the research house said about 44% of the total crude oil supply across key Middle Eastern producers such as Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE) has gone offline.
Oil supply has fallen from 24.8 million barrels per day (mbpd) in February 2026 to 10.8 mbpd, due to the Iran war.
Iraq and Kuwait are among the most impacted, with 75% and 78% of output offline, while Qatar has seen nearly 89% of its supply disrupted.
Saudi Arabia continues partial exports via the Yanbu bypass, in which its operational capacity has been restored after an attack, while UAE exports have declined by 53% from Fujairah.
HLIB Research said the supply shortfall is unlikely to be fully replaced in the near term, even under sustained oil price levels of US$100 per barrel.
Rystad Energy estimates that global offshore production (excluding Middle East) would take up to 15 years to close the gap, with only about five to nine mbpd of incremental supply by 2040, which is insufficient to offset the near to medium-term shortfall.
While US shale remains the most responsive source of incremental supply, even under a sustained US$100 per barrel scenario, it would only reach about 2.5 mbpd of additional output by 2029.
This reinforces a structurally tighter global oil market, where short-cycle supply provides only partial relief and is insufficient to offset prolonged disruptions.
“According to Rystad, the escalation of Middle East tensions presents a mixed outlook for South-East Asia’s exploration and production sector, characterised by near-term operational disruptions but longer-term structural upside.
“In the immediate term, risks are skewed towards higher costs (like subsea and drilling), fuel shortages and delays in offshore activities, particularly for deepwater and jack-up segments.
“However, over the medium to long term, the supply risk from the Middle East is expected to catalyse increased regional activity, including greater exploration spending, stronger interest from international and Asian national oil companies, and rising liquefied natural gas-linked developments,” stated HLIB Research.
The increased activities, according to the research house, could drive portfolio expansion, and project-financing momentum.
It would ultimately position South-East Asia as a strategic alternative supply hub amid Middle East instability.
