Oil prices surge amid geopolitical tensions, boosting energy stocks

Oil prices surge amid geopolitical tensions, boosting energy stocks

Sustained high oil prices, coupled with geopolitical tensions and supply chain disruptions, pose a more favourable outlook for energy and marine transport stocks compared to the broader market.

The Dinh Co Gas Processing Plant is operated by PV Gas. — Photo pvgas.com.vn

Global oil prices have seen a significant surge due to escalating geopolitical tensions in the Middle East, resulting in a robust performance from energy stocks on the Vietnamese stock market. 

As the broader market experienced turbulence, capital flowed into energy shares, marking them as a rare bright spot during a challenging trading session.

The market benchmark VN-Index opened the week with a decline of 34.23 points, settling at 1,846.10 points, as widespread selling hit the banking, real estate and securities sectors. Total market liquidity surged to tens of trillions of đồng, reflecting cautious sentiment among investors and robust portfolio restructuring activities.

While many large-cap stocks languished in negative territory, the oil and gas sector demonstrated impressive resilience. 

Many energy stocks surged to their daily ceiling prices, driven by expectations that oil prices would remain elevated amid increasing supply disruption risks. Notable performers included PV Gas (GAS), Binh Son Refining and Petrochemical JSC (BSR), Petrolimex (PLX), PV Drilling (PVD), Petrovietnam Technical Services Corporation (PVS) and PV Oil (OIL), all of which registered substantial gains and positively impacted the overall index.

This upward trend in the energy sector extended for the third straight day and is expected to continue in the upcoming sessions, buoyed by a recent report from PetroVietnam Securities Joint Stock Company (PSI). 

The report highlighted that sustained high oil prices, coupled with geopolitical tensions and supply chain disruptions, pose a more favourable outlook for energy and marine transport stocks compared to the broader market.

On the international market, Brent crude oil jumped 2.94 per cent to US$83.78 per barrel at 1.50pm (Việt Nam time) on March 4. Brent crude had previously soared up to 14 per cent, pushing prices near $80 a barrel on Saturday night.

Within the Petrovietnam ecosystem, PetroVietnam Transportation Corporation (PVT) stands to benefit from rising freight rates, supported by a robust fleet and flexible contract structures. In the downstream segment, BSR is expected to gain as refining margins improve due to the widening gap between crude oil and refined product prices.

Upstream, persistently high oil prices will favour companies like GAS, PVD and PVS as demand for exploration, extraction and technical services improves. 

Fertiliser firms, including Petrovietnam Ca Mau Fertiliser JSC (DCM) and Petrovietnam Fertiliser and Chemicals Corporation (DPM), may also see short-term benefits from rising gas prices and input costs, influencing urea price levels.

Nguyễn Thế Minh, head of the Research and Development Division at Yuanta Vietnam Securities Company, told tienphong.vn that while geopolitical conflicts generally have a short-term negative impact on stock markets, the adverse effects tend to diminish over time.

Historical data from Yuanta showed that, on average, indices form their lowest points about 22 trading days after the onset of such events and take roughly 47 trading days to recover.

However, the negative impact of conflicts in the Middle East usually proves less severe compared to those in other regions. Yuanta's regression modelling shows that oil price fluctuations exert a strong inverse influence on the S&P 500 index. And when oil prices surge, the S&P 500 typically declines.

Minh advises investors to capitalise on the recent strong performance of energy stocks, locking in profits from the recent rally while observing potential corrections in other sectors to accumulate positions for subsequent recovery phases. He underscored the inherent unpredictability of geopolitical factors.

The Dinh Co Gas Processing Plant is operated by PV Gas. — Photo pvgas.com.vn

As for domestic developments, the Vietnamese oil and gas sector could enter a new phase of growth. 

Prior to the US-Iran conflict, oil stocks had already seen strong gains, with GAS doubling from VNĐ61,300 to VNĐ118,000 over three months, while BSR nearly tripled from VNĐ13,500 to VNĐ36,000.

Domestic policy changes have created favourable conditions for the oil and gas industry to flourish. VCBS has indicated that legal framework improvements and accelerated investment prospects position Việt Nam's oil sector for recovery, warranting a revaluation of energy stocks in light of increased growth potential from 2026 to 2028.

Since 2025, the Government has addressed legal bottlenecks to enhance upstream operations. Resolutions have emphasised national energy security and efficient resource use to meet socio-economic development needs.

Moreover, new regulations have empowered Petrovietnam to expedite oil and gas project approvals, further stimulating domestic exploration and production activities. The legal adjustments aim to align energy planning with a target of achieving 10 per cent annual economic growth from 2026 to 2030. 

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