On Friday at 11:31 AM (Bangkok time), the share price of Tipco Asphalt Public Company Limited (SET: TASCO) rose by 1.19% or THB 0.20 to THB 17.00, with a trading value of THB 201.86 million.
Krungsri Securities (KSS) views Venezuela’s exit from OPEC as aligning with the increasingly influential stance of the United States towards Venezuela since early 2026. This shift is also reflected in the renewed efforts to boost Venezuelan oil exports, following the easing of restrictions allowing U.S. companies to return and invest in Venezuela.
From a long-term perspective, the development is seen as positive. On a broader scale, it signals changes in OPEC’s role in attempting to control global oil prices, even though Venezuela was not part of the quota system for increasing or decreasing oil production levels. Furthermore, this move is expected to reduce policy and sanction risks associated with Venezuelan oil, which would benefit TASCO by supporting the normalization of Venezuelan oil supply in its operations.
While Venezuela’s immediate departure from OPEC is not expected to increase oil supply right away, due to ongoing infrastructure challenges and the need to address long-standing investment shortfalls, the outlook remains constructive.
Currently, TASCO has resumed purchasing oil from Venezuela for the first time in six years, with the initial delivery of 600,000 barrels in late July. This transaction was conducted under a spot contract, which means negotiations occur on a per-shipment basis, as opposed to the previous long-term contracts that specified a fixed purchasing volume.
According to the brokerage, this arrangement is deemed normal at this early stage of renewed engagement, and the development is expected to enhance opportunities for increased supply over the longer term. It is also assessed that Venezuelan crude offers a higher production yield—around 70%, compared to 50-60% from other sources.
Additionally, profit margins have improved, although the upside may not be as pronounced as in previous cycles due to a reduction in bargaining power, as demand for Venezuelan oil has risen. Nevertheless, this factor is considered a medium- to long-term upside for profits, with potential annual earnings to rise to the range of THB 2-2.2 billion. There are also ongoing negotiations to secure additional supply within the year.
As a result, Krungsri maintains a ‘Buy’ recommendation for TASCO on a speculative basis, with a target price for 2027 of THB 18.90 per share, based on a P/BV of 2x. This reflects the company’s business operations using Venezuelan oil as previously seen before 2020 (excluding the 2015 supercycle period), with the valuation also factoring in a -1SD discount to reflect the current trend of reduced bargaining power.
