2H Outlook: Refining leads energy preference sequence amid Hormuz reopening (Buy S-Oil (on CL), d/g SCC to Sell, u/g ONGC to Neutral)

Research evidence excerpt

2H Outlook: Refining leads energy preference sequence amid Hormuz reopening (Buy S-Oil (on CL), d/g SCC to Sell, u/g ONGC to Neutral)

Goldman Sachs APAC Energy & Chemicals

Exhibit 3: We expect crude inventories to build in 2H26 Exhibit 4: The additional one-month delay in ramping

while product inventories remain tight, suggesting refinery runs drives further declines in product inventories

refining capacity re-emerges as the key bottleneck in our base case vs. our prior estimate

days of use OECD: Total product inventory *Excluding 2020

2019-24 range* 2025 2026

48 Base case (old)

Base case

Bull case

40 Bear case

28 Historical minimum

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Kpler, Wood Mackenzie, Goldman Sachs Global Investment Research Source: Wood Mackenzie, Energy Aspects, Goldman Sachs Global Investment

Research

Exhibit 5: Under the bull case, delayed refinery-run Exhibit 6: Refining margins have remained resilient amid

normalization to October could push OECD product falling crude prices

inventories to near their historical minimum days-of-use

level

days of demand

US$/bbl Singapore complex GRM OECD: Product inventory (inclusive of strategic reserves)

55 95

50 Bull case 75

Bear case

45 55

Historical minimum -5

25 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

20 2015-19 Range 2020 2021 2022

1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2023 2024 2025 2026

Source: Wood Mackenzie, Goldman Sachs Global Investment Research Source: Platts

Exhibit 7: We raise our Singapore complex GRMs forecasts

2026E 2027E 2028E 1Q26 2Q26E 3Q26E 4Q26E 1Q27E

Refining Margins Old New Old New Old New Old New Old New Old New Old New Old New

SG Complex GRMs $14.6 $23.2 $12.8 $13.9 $11.2 $11.2 $15.1 $18.6 $16.5 $39.7 $13.5 $19.8 $13.4 $14.9 $13.9