CLSA Securities (Thailand) projects a stable outlook for the Thai energy sector as the Strait of Hormuz reopens amid expectations of a US-Iran peace agreement.
Despite a 9% slide in Brent crude prices over the past week—driven by easing geopolitical tensions—refiners such as BCP, TOP, and SPRC are expected to post solid profits in the second quarter of 2026. CLSA maintains that refinery gross refining margins (GRM) will likely soften in the second half of the year at US$10/bbl but remain healthy, with an anticipated Brent price of around $80 per barrel.
Upstream player PTTEP is seen to face ongoing challenges due to its high sensitivity to oil prices, with each $5 per barrel swing impacting annual net profits by 7%. The company recorded a $267 million hedging loss in the first quarter of 2026 but is not expected to see significant further hedging gains or losses in the second half, as it has largely unwound its positions.
Refiners will benefit from increased crude availability, with crude premium for Murban dropping to $8 per barrel from $13 in June and $20 in May. Jet fuel and diesel spreads have narrowed but GRM for Thai refiners is currently estimated at around $15 per barrel for 2Q26. CLSA forecasts GRM to moderate to $10 per barrel in the latter half of the year, which remains above historical norms.
Petrochemical firms face a more challenging environment, following a sell-off across the region. The end of the regional conflict and new global ethylene capacity is leading to a cautious market stance. HDPE spread over naphtha is projected to ease to $450 per ton in 2H26.
However, SCC is well positioned to benefit from lower feedstock prices and increased naphtha flows following the Hormuz reopening, despite current temporary plant shutdowns in Thailand and Vietnam.
