Oil prices to stay higher for longer – study
Motorists line-up at a gas station in Paco, Manila on Monday, April 13, 2026, a day before the expected fuel price rollback. INQUIRER PHOTO / NIÑO JESUS ORBETA
MANILA, Philippines — Oil prices are unlikely to retreat to pre-Iran conflict levels even if the fragile United States-Iran ceasefire holds, keeping pressure on inflation and equities.
This is according to a report by First Metro Securities Brokerage Corp. distributed by DBS Bank, which said that structural damage to energy supply chains and persistent geopolitical risk premia meant that oil could settle at a higher “new equilibrium” of about $80 to $90 per barrel.
Before the conflict escalated on Feb. 28, Brent crude had traded at around $72 per barrel. It then surged past $100 and briefly peaked close to $120, underscoring the supply shock triggered by disruptions in the Strait of Hormuz.
The implications are immediate for the Philippines, one of the most energy-sensitive economies in Asia. The country sources over 96 percent of its crude oil imports from the Middle East, making it highly vulnerable to global price swings.
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Higher oil prices feed directly into inflation, local currency and interest rate expectations. March inflation already breached the Bangko Sentral ng Pilipinas’ 2 percent to 4 percent target range, reflecting the transmission of fuel costs into transport, utilities and food prices.
Two-path outlook
Against this backdrop, Philippine equities now face a “two-path outlook,” with market direction tied to how oil and geopolitics evolve, the research said.
If talks fail, oil could spike to $100 to $150 per barrel anew, worsening inflation and eroding purchasing power, it noted.
DBS estimated that at $100 per barrel oil pricing, Philippine gross domestic product growth could take a 0.4-percentage-point hit while inflation could rise by 1.1 percentage points.
On the other hand, a durable ceasefire could still trigger a relief rally—but only if energy pressures ease further and macroeconomic conditions stabilize.
READ: US oil benchmark opens higher after sharp fall
For First Metro, this means that shipping lanes are normalizing, oil is trending lower within the new range, the peso is stabilizing and inflation is moderating. In turn, these factors are seen to allow the BSP to step back from a more hawkish stance.
If these conditions materialize, investors may rotate into “high beta” stocks or those whose price swings tend to be greater than those of the benchmark index. These include banks and property firms, which are supported by returning foreign flows and improving earnings visibility, it noted.
Top picks
First Metro recommends large-cap names, including BDO Unibank Inc., Bank of the Philippine Islands, SM Prime Holdings Inc., International Container Terminal Services Inc., Manila Electric Co., Puregold Price Club Inc., Robinsons Land Corp. and Converge ICT Solutions Inc.
Still, the recovery remains incomplete. Before the conflict, the Philippine Stock Exchange Index stood at 6,611.24.
The index later dropped to an intraday low of 5,816.62 and was only at 6,063.35 as of April 15, still below pre-Iran war levels.
In contrast, US equities have already clawed back most of their losses, underscoring how Philippine markets remain more exposed to lingering oil and inflation risks.
READ: Red flags raised as fuel crisis revives PH-China oil talks
For now, the brokerage recommends a “balanced” approach, combining defensive names with selective exposure to high-beta stocks while awaiting clearer signals on oil and a more lasting peace in the Middle East. INQ
