Broker Name: DBS Bank Ltd
Date of Report: 22 January 2026
Excerpt from DBS Bank Ltd report.
- Report Summary
- Oil prices are facing increasing upside risks in early 2026 due to escalating geopolitical tensions involving Venezuela and Iran, and US policy uncertainty. Despite muted fundamentals and potential supply glut, OPEC+ has paused production increases, providing short-term relief to the market.
- Share prices of oil majors have outperformed oil prices, supported by resilient returns, volume growth, and non-oil catalysts. DBS’s top regional picks include PetroChina, PTTEP, and Medco Energi, which are seen as safe havens amid trade-war uncertainty and a weak US dollar.
- Geopolitical events, such as US military actions in Venezuela and unrest in Iran, could push oil prices sharply higher if critical supply routes or infrastructure are threatened, though a full closure of transit chokepoints is considered extreme.
- OPEC+’s decision to pause production increases allows time to assess Western sanctions on Russian oil majors, but US oil production continues at record highs, and non-OPEC supply remains robust.
- Venezuela’s oil reserves are large but consist mostly of extra-heavy crude that is expensive and technically challenging to extract; meaningful increases in supply require stability and investment.
- Western sanctions on Russian oil are expected to have limited long-term impact, as supply chains adapt and reroute flows through intermediaries; the main risk is if India or China stop buying Russian oil, which could drive prices higher.
- For 2026/27, DBS forecasts Brent crude to average USD62-67/bbl, with upside risks from geopolitical developments already factored into its projections.
- Recommended stocks: Medco Energi (BUY), PTTEP (BUY), PetroChina (BUY). These companies are projected to deliver strong earnings growth, resilient volume, and attractive dividends, with valuation remaining attractive compared to global peers.
Above is an excerpt from a report by DBS Bank Ltd. Clients of DBS Bank Ltd can be the first to access the full report from the DBS website: https://www.dbs.com
