Gurus say high refining margins will last through Q1 2027, lifting refinery stocks another 10–15%

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The Ministry of Energy is adjusting its plan to cope with a possible prolonged energy crisis, after conflict in the Middle East and disrupted maritime shipping routes caused global oil prices to swing. Pongpol Yodmuangcharoen, spokesman for the Ministry of Energy, said the Cabinet approved a plan to handle fuel crises and a strategic plan for the Fuel Fund for 2026–2029, which supports greater use of biofuels to increase domestic raw material use and cut crude oil imports, amid a still-tight Fuel Fund position. Nalinrat Kittikampolrat, senior director at Asia Plus Securities, assessed that the government has three management options: borrowing money, letting oil prices float, and the approach currently in use, which is asking refinery operators to cut the ex-refinery diesel price by 4 baht per litre from 16 September to 31 October 2026, which leaves refineries bearing about 1 billion baht per month, or roughly 3 billion baht per quarter per refinery. The impact on profits remains limited, however, because refining margins are still high. Suwat Sinsadok, managing director of Globlex Securities, assessed that the Fuel Fund has accumulated losses of almost 100 billion baht and that refining margins are likely to stay high through the first quarter of 2027. Currently, gross refining margins are about 40–50 US dollars per barrel; after deducting operating costs of 10–20 US dollars per barrel and the portion supporting the government, net refining margins remain at about 15–20 US dollars per barrel. He estimated that refinery stocks still have room to rise another 10–15%, ranking TOP as his number one pick, followed by SPRC and BCP. He also said that if global crude oil prices stay around 100 US dollars per barrel, the government can still manage without introducing additional subsidy measures, reducing the risk of intervention, unless global crude oil prices surge to 120 US dollars per barrel.

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Article notes refining margins are high (40-50 USD/bbl) and expected to stay high through Q1 2027 amid Middle East conflict and disrupted shipping, supporting distillate/heating oil prices.