KUALA LUMPUR (April 9): Malaysia’s oil and gas (O&G) sector remains a bright spot for investors as structural supply tightness persists despite a brief reprieve in global crude prices following a two-week ceasefire between the US and Iran, BIMB Research said.

Brent crude prices tumbled 16% to US$96.70 (RM384.71) per barrel overnight after the announcement of a two-week truce, yet the underlying market remains strained by a massive drawdown in global inventories.

“We estimate global inventories have declined by 400 million barrels (mbpd) over the past 40 days, based on a drawdown rate of 10mbpd,” BIMB Securities said in a note on Thursday.

The research house added, “The system remains structurally tight, and prices will continue to reflect a meaningful geopolitical risk premium.”

The research house raised its 2026 Brent forecast to US$85 per barrel from US$76 per barrel, citing a slower-than-expected recovery for production and export flows through the Strait of Hormuz.

Normalisation of oil flows is not expected until at least the third quarter of 2026 due to ongoing facility disruptions and operational bottlenecks.

In the interim, O&G operators are expected to pivot their strategies to maximise output while prices remain elevated.

“Operators are likely to defer non-critical maintenance and planned shutdowns, maximising production uptime to benefit from stronger realised prices,” the research house added.

Among its top picks, BIMB Securities continues to favour MISC Bhd (KL:MISC) with a 'buy' call and a target price of RM9.80 for its stable earnings and defensive dividend yield of 4% to 5%. 

Hibiscus Petroleum Bhd (KL:HIBISCS) is also highlighted as a key pick with a 'buy' call and a target price of RM2.65 due to its production growth and potential entry of strategic investors by the end of fiscal year 2026.

BIMB Securities is maintaining its 'overweight' call on the O&G sector.