SGX-listed energy stocks surge, regional names mixed, as oil prices rally on Israel-Iran conflict
[SINGAPORE] Several energy counters in Asia jumped in early trade on Monday (Jun 16), on the back of global crude oil prices surging amid escalating conflict in the Middle East between Iran and Israel.
Brent crude futures rose US$1.70 or 2.3 per cent to US$75.93 a barrel during Asia hours, while US West Texas Intermediate (WTI) crude futures gained US$1.62, or 2.2 per cent, to US$74.60.
Oil prices had jumped 7 per cent on Friday as Israel and Iran first traded strikes.
In Singapore, shares of oil and gas companies listed on the Singapore Exchange (SGX) such as Rex International and RH PetroGas rose more than 6 per cent at market open on Monday
As at 9.04 am, multinational oil exploration and production company Rex International gained 9.8 per cent or S$0.02 to S$0.225, with 13.3 million securities changing hands. By 9.30 am, its share price had eased to S$0.22, though the counter was still up 7.3 per cent or S$0.015.
The company's share price has had an upward trajectory since early June, following its Jun 6 update on its subsidiary Lime Petroleum's assets in Norway, Benin and Germany.
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Notably, Lime Resources Germany, which was founded in late-2024, was said to have interests in four onshore exploration licences and one onshore production licence in the Rhine Valley, and one onshore production licence in Bavaria.
Its share price has since increased steadily from S$0.14 on Jun 9, to S$0.18 on Jun 11 and S$0.205 on Jun 13.
On Nov 7, 2023, Lime Petroleum had entered into an agreement to acquire a 17 per cent interest in PL740, an oil and gas licence for a field in the Norwegian North Sea.
In addition, RH Petrogas was up 6.8 per cent or S$0.013 at S$0.205 in early trade, with 5.2 million securities changing hands. At 9.45 am, its price eased to $0.199, still up 3.7 per cent or S$0.007, before rising again to S$0.20 by 9.56 am. The company's price performance had shown regular improvement since Jun 10's price of S$0.141, before today's spike.
Other maritime and energy SGX-listed stocks which had sharp increases were Mermaid Maritime , which rose more than 10 per cent to S$0.121, and CH Offshore , which gained around 21 per cent to S$0.017. As at 10.18 am, their share prices had eased to S$0.118 and S$0.016, respectively.
Meanwhile, oil and gas counters in Malaysia such as Petronas Gas and Dialog Group were up 0.7 per cent at RM17.96, and 3.8 per cent at RM1.63 in early trade, respectively.
Equity research analyst at Maybank Jeremie Yap has kept a 'buy' rating on Dialog Group and an unchanged target price of RM2.34, considering how the group has signed a production sharing contract with Petronas for the Mutiara Cluster small field asset, located off the coast of Sabah.
'We understand that ChemOne's development of Pengerang Energy Complex and Petronas' RM6 billion (S$1.8 billion) development of a biorefinery with Eni and Euglena could require tank terminals for storage of refined and/or crude products, which Dialog Group is well-positioned to secure,' he said in his Jun 15 report.
The FBM KLCI Energy Index rose 11 points or 1.5 per cent to 751.86.
On the Hong Kong stock exchange, China National Offshore Oil Corp was down nearly 1 per cent or HK$0.14 at HK$18.56 as at 11.59 am. PetroChina shares were also down 0.5 per cent or HK$0.04 at HK$7.36.
Official data released on Monday showed that China's crude oil output declined by 1.8 per cent in May from a year earlier to the lowest level since August 2024, as maintenance at both state-owned and independent refineries curbed operations.
Will crude oil prices jump further?
UOB head of markets strategy Heng Koon How said that previous conflicts between Israel and Iran over the last year had limited impact on oil prices, on a medium-term horizon.
A key reason behind this is that the US is now a major producer of crude oil. 'The US now produces more than 13 million bpd, significantly more than the current nine million bpd production from Saudi Arabia,' wrote Heng on Monday.
DBS chief economist Taimur Baig and foreign exchange and credit strategist Chang Wei Liang echoed Heng's sentiment, noting that the market thus far is 'inclined to coalesce around the less-dire possibilities'.
'The fact that the Iraq-Iran war during the 1980s and associated disruptions to oil and gas supply and production did not cause a 1970s-style oil shock may well be informing the market's composure,' they wrote in their report on Monday.
'At a time when global demand softness is a greater source of worry than supply tightness, the bar for a major oil rally is high.'
That said, a dangerous escalation would be for Iran to target US military assets or attack regional crude oil production, storage and shipping facilities across the Middle East, said UOB's Heng.
'The worst-case scenario would be a blockade of the Strait of Hormuz – a key shipping lane – which would disrupt crude oil supply to the rest of the world suddenly,' he added.
Although near-term volatility is considered, Heng refrains from making any 'knee-jerk adjustments' to his Brent oil forecast of US$65 per barrel for the third quarter of 2025, and US$60 per barrel for the fourth quarter of this year.
'This is ultimately pending further developments in the two key variables – that of Iran's extent of retaliation and the reaction function of Saudi Arabia and Opec+ (the Organization of the Petroleum Exporting Countries and other oil-producing nations),' he noted.
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