PETALING JAYA: A gradual de-escalation of the US-Iran conflict is expected to bring Brent crude oil prices back to more sustainable levels in the second half of financial year 2026 (2H26), after geopolitical tensions drove prices briefly above US$100 per barrel earlier this year.
MBSB Research expects Brent to settle in a range of US$80 to US$90 in 2H26 after prices swung between US$98 to US$102 in 1H26, assuming that a gradual de-escalation of the US-Iran war would occur, which would lead to the full or partial reopening of vital shipping lanes.
In 2025, oil prices averaged at US$68.03 per barrel and traded at US$72.5 at the time of writing.
“Fundamentals may shift to a surplus of oil and gas in the market, as the geopolitical tensions have caused a backlog of barrels by both the closure of the Strait of Hormuz and increased production in the Americas.
“This would contrast to a headwind in demand as the global economy is still in the middle of normalising after the initial shock of the war,” MBSB Research added.
It said while Brent crude may ease, products like diesel and jet fuel are likely to remain tight and expensive due to refineries facing lower throughputs in 1H26.
Meanwhile, Maybank Investment Bank Research (Maybank IB) sees Brent crude oil prices averaging at US$85 in 2026.
It said the crude oil markets have pretty much “priced in most of the fading risk premiums” as there were multiple peace deal attempts in the second quarter of financial year 2026 (2Q26) and easing supply chain issues as oil majors found route diversifications to bypass the Hormuz.
This includes Saudi Arabia using the East-West pipeline and Iran reviving the Kirkuk-Ceyhan pipeline to Turkiye.
“For Malaysia, we expect war beneficiaries like Dialog Group Bhd
and MISC Bhd to have a bumper 2Q due to higher realised oil prices and elevated petroleum tanker rates.
“For oil and gas services and equipment names, we expect a stronger 2Q and 3Q as companies move past the annual 1Q monsoon weakness,” Maybank IB said.
Once the conflict in the Middle East eases, the research house expects global oil majors to embark on a new capital expenditure upcycle, driven by two key factors.
The first is the need to repair damaged energy infrastructure in the region.
The second is a renewed focus on energy security, with countries seeking to diversify their energy sources away from the Middle East and accelerate the development of oil and gas fields in other producing regions.
On its stock picks, the research house continues to favour Keyfield International Bhd and Perdana Petroleum Bhd, expecting both offshore support vessel operators to benefit from an improving operating environment as offshore activities recover after the seasonal first-quarter monsoon slowdown.
It sees compelling value in Perdana Petroleum as it sits on a net cash pile of RM177mil, which represents almost half of its market capitalisation.
“Perdana also intends to complete its capital reduction exercise in 2H26, which suggests potential dividend distributions in the near future, which could be a re-rating catalyst. We have ‘buys’ on Dialog and Velesto Energy Bhd.”
