Despite oil pricing hitting past US$100, MBSB Research has maintained its POSITIVE outlook on the country’s oil and gas sector, saying elevated Brent crude prices should continue to support upstream activity, tanker demand and storage utilisation, although downstream players could face margin pressure from higher feedstock costs.
The research house said the global oil market has shifted from a temporary geopolitical shock into a more persistent environment characterised by supply disruptions, maritime chokepoint risks and refining bottlenecks. It cited projections from the US Energy Information Administration and S&P Global Energy that point to elevated crude prices through late 2026 before conditions ease in 2027.
EIA expects Brent to average about US$91 per barrel in 2026 before declining to US$74 in 2027, while S&P Global Energy sees Brent averaging at least US$90 in 2026 and about US$85 in 2027, with prices remaining volatile in the US$80–US$100 range.
MBSB said the supply squeeze has been intensified by sanctions, tanker attacks and regional shipping disruptions. Iranian oil loadings have fallen to about 260,000 barrels per day from around 1.7 million barrels per day before the conflict, while Middle East production shut-ins reached 6.7 million barrels per day in August, up from 5.0 million in July.
The research house said continued inventory drawdowns and logistical bottlenecks should keep prices supported, even as weak refining capacity and softer Chinese seaborne crude demand limit the scope for an uncontrolled price surge. It expects trade flows to normalise only gradually, with most routes returning closer to pre-conflict levels by the second quarter of 2027.
Malaysia Faces Both Fiscal Upside And Subsidy Pressure
For Malaysia, MBSB said high oil prices present a mixed picture as the country is both an exporter of crude oil and LNG and an importer of refined petroleum products.
Higher Brent prices should lift PETRONAS earnings and government revenue. MBSB estimates that every sustained US$1 per barrel increase in Brent could generate roughly RM300 million to RM350 million in additional annual government revenue through petroleum income tax, royalties and PETRONAS dividends.
However, the fiscal gains could be partly offset by a larger fuel subsidy bill, particularly if retail petrol prices remain capped.
MBSB expects Malaysia’s upstream segment to be among the main beneficiaries, as stronger crude prices and LNG demand give PETRONAS greater incentive to accelerate projects. Offshore support vessel charter rates, drilling activity and maintenance work are also expected to remain firm.
Among upstream-related names, the research house sees Bumi Armada, Malaysia Marine and Heavy Engineering and Deleum as beneficiaries of stronger project economics, higher offshore activity and possible order book replenishment.
MISC And Dialog Are Top Picks
MBSB identified MISC Bhd and Dialog Group Bhd as its top sector picks, maintaining BUY calls with target prices of RM9.22 and RM2.57, respectively.
It views MISC as a strong beneficiary of longer shipping routes caused by Middle East disruptions, which increase ton-mile demand and support tanker charter rates. Dialog, meanwhile, is expected to benefit from stronger demand for oil storage at its Pengerang and Tanjung Langsat terminals as traders and oil majors seek buffer capacity amid shifting trade routes.
The research house was more cautious on the downstream segment. It expects high crude prices to raise feedstock costs and compress margins for refiners and petrochemical producers, with Petronas Chemicals Group seen facing mixed to moderately negative effects.
MBSB said the sector’s strongest opportunities remain in upstream and midstream businesses, while companies with flexible capital spending, strong balance sheets and exposure to shipping, storage and energy infrastructure are better positioned to navigate the current oil-price environment.
