Oil and gas sector set for strong Q2 as upstream outshines downstream

According to a report released by MBS Research on June 29, second-quarter 2026 business results across the oil and gas sector are expected to improve thanks to the average Brent Crude Oil price remaining at an elevated level throughout the quarter, alongside accelerated implementation of major domestic oil and gas projects.

However, the degree of benefit is expected to vary across different segments of the value chain.

The upstream segment is expected to be the industry's brightest performer during the second quarter (Q2) as the average Brent Crude Oil price reaches approximately $97 per barrel.

At the same time, the accelerated rollout of key domestic oil and gas projects is creating a substantial volume of work for oilfield technical service providers.

Exploration and production activities have also become more vibrant than in previous years, reflecting that the oil and gas investment cycle is entering a recovery phase.

For Petrovietnam Technical Services Corporation (PVS), the company continues to benefit from a sizeable backlog associated with major domestic projects such as the Lac Da Vangoil field in the Cuu Long Basin and the offshore Block B–O Mon gas-to-power project in the Malay–Tho Chu Basin.

According to MBS Research, progress on several contract packages has exceeded expectations, while Su Tu Trang’s second-phase 2B contract, signed in April, has further strengthened the company's order backlog for the coming years.

As a result, PVS's Q2 net profit is forecast to reach $17.1 million, up 18.5 per cent on-year.

For Petrovietnam Drilling and Well Services Corporation (PVD), growth is expected to be driven by the official commencement of operations of the PVD IX jack-up drilling rig in April, lifting the company's total number of operating jack-up rigs to the highest level in its history.

In addition, the company's existing rigs continue to operate at near-full capacity across Vietnam, Malaysia, Brunei and Indonesia, while day rates remain around $90,000 per day as market supply continues to lag demand.

MBS Research forecasts PVD's Q2 net profit at $13.6 million, representing an on-year increase of 41.3 per cent.

In the midstream segment, MBS Research believes business performance will generally remain stable, although there are still few catalysts capable of driving significant innovation

For Petrovietnam Gas Joint Stock Corporation, elevated oil prices during most of the quarter supported selling prices for dry gas, liquefied petroleum gas (LPG), and condensate.

At the same time, the company continued expanding its liquefied natural gas import activities, importing 354,000 tonnes during the first six months of the year while securing an additional 140,000 tonnes of LPG to ensure supply for power generation, industrial production and consumer demand.

Nevertheless, the company's Q2 net profit is projected to decline 24.8 per cent on-year to $142.8 million, mainly because the same period last year recorded a provision reversal worth approximately $64 million.

Excluding this one-off item, the company’s core earnings are expected to remain broadly flat compared to one year ago.

Meanwhile, PetroVietnam Transportation Corporation (PVT) continues to maintain a high fleet utilisation rate, with its entire fleet operating steadily.

Although tensions in the Middle East have contributed to higher international crude oil tanker freight rates, the benefits to PVT are expected to be largely indirect, given that its fleet is primarily concentrated in specialised segments such as oil tankers and LPG carriers.

MBS Research forecasts PVT's Q2 net profit at $14 million, up 18.8 per cent on-year, supported by strong fleet utilisation, newly commissioned vessels, and a more favourable freight rate environment.

The downstream segment is expected to witness the greatest divergence in performance, as oil price movements affect individual companies differently.

For Binh Son Refining and Petrochemical JSC (BSR), after being adversely affected in Q2 of 2025 by oil price volatility and inventory write-down provisions, business performance is expected to recover strongly this year.

MBS Research forecasts BSR’s Q2 net profit at $163.1 million, soaring almost 38.2 per cent on-year, driven by improved petroleum and diesel crack spreads, the absence of significant inventory revaluation losses, and the continued high-capacity operation of Dung Quat Oil Refinery to meet robust domestic demand.

In contrast, Vietnam National Petroleum Group is forecast to report a 10.3 per cent on-year decline in Q2 net profit to $46.1 million.

Although petroleum sales volumes continue to increase, profit margins are expected to narrow as the company is still selling inventory purchased at elevated oil prices during Q1 and early Q2, while domestic retail fuel prices are adjusted in line with the government's pricing cycle.

With an inventory turnover cycle of approximately 21 to 23 days, the company has yet to fully benefit from the decline in oil prices towards the end of the quarter, thereby placing pressure on its profit margins during the period.

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