On Friday at 12:07 PM (Bangkok time), the share price of Thai Oil Public Company Limited (SET: TOP) gained 3.91% or THB 1.75 to THB 46.50, with a trading value of THB 584.95 million.
Daol Securities (Thailand) wrote that Thai Oil is likely to benefit from a strong Market Gross Refining Margin (GRM) in the second quarter of 2026, reflecting the widening spread between refined oil product prices and crude oil.
The robust crack spread is being driven by three key factors: the closure of the Strait of Hormuz, which has reduced refinery output in the Middle East and Asia by approximately 3.5 million and 2.7 million barrels per day, respectively; a decline in Russian oil product exports due to Ukrainian attacks; and inventory levels of key oil products remaining below long-term averages.
The average crack spread for major oil products has risen significantly so far in 2Q26. Diesel recorded a spread of $63.4 per barrel, up 301% year-on-year and 196% from the previous quarter. Jet fuel saw a spread of $63.3 per barrel, a 344% increase year-on-year and 204% increase quarter-on-quarter. Gasoline reached $28.4 per barrel, up 147% year-on-year and 243% from the preceding quarter.
Nevertheless, Thai Oil expects the crack spread to soften in 2H26 following a peace agreement between the U.S. and Iran. Oil production capacity in the Middle East is projected to recover to about 80% within 7-8 weeks and return to full capacity within 16 weeks.
Although a decline in crack spread is anticipated compared to the first half, Daol forecasts this contraction will occur at a slower pace than that of crude oil prices, as crude prices could come under pressure sooner with the release of stored oil back to the market after the Strait of Hormuz reopens.
For the earnings outlook, Daol estimates Thai Oil’s net profit for 2026 and 2027 at THB 15.3 billion and THB 11.7 billion, respectively, compared to THB 14.6 billion in 2025. Net profit in 2026 is expected to grow by 5% year-on-year, supported by strong Market GRM and a higher crude run rate. However, in 2027, net profit is forecast to decline by 24% due to the potential recognition of net stock losses.
Daol assigns a ‘Buy’ recommendation on Thai Oil, with a target price of THB 55.00 per share, based on a 2026 PBV of 0.69x, or about 0.6 standard deviations below the five-year historical average. The strong Market GRM in 2Q26 is expected to offset potential impacts from stock losses, higher crude oil premiums, and a reduction in ex-refinery retail diesel prices by THB 2.00-5.00 during 9 April–19 May 2026.
