Oil prices spiked following the air strikes between Israel and Iran.
Prices surged as high as 13% on Friday over concerns of disruptions in the Middle East oil supply.
The US stock market reacted negatively to this development.
On the other hand, if oil prices remain high, three Singapore-listed companies may benefit.
Seatrium Limited (SGX: 5E2)
Seatrium is an engineering solutions company specialising in engineering solutions for energy infrastructure.
This infrastructure includes rigs and floating production storage, offloading (FPSO) units and vessel construction.
The firm’s Singapore operations also boasts the largest integrated yard globally with a strong delivery track record.
When oil prices increase, offshore exploration and production spending increase in tandem.
This increased spending drives demand for infrastructure services offered by Seatrium, bolstering its core revenue streams.
As the offshore and marine industry improves, Seatrium’s net gearing ratio decreased to 0.11 times at the end of 2024.
This means that Seatrium will have more bidding power for larger projects to capitalise on the oil price uptick.
In addition, Seatrium has also secured contracts for FPSO units P-84 and P-85 from Petrobras (BVMF: PETR4) to start construction in the first quarter of 2025 (1Q 2025).
These additional assets place Seatrium in a strategic position to capitalise on this upturn in oil prices.
According to a Morningstar report on 30 May 2025, analysts forecasted an operating margin expansion to 10.3% by 2028.
The analysts also estimated a fair value on Seatrium’s stock price at S$2.92.
This is a 41.7% upside from its current trading price of S$2.06 as of 13 June 2025.
Keppel Ltd (SGX: BN4)
Keppel is an alternative asset management firm with S$88 billion of funds under management.
The company’s key business segments include real estate, infrastructure and connectivity.
The firm’s best performing division is its infrastructure segment which invests in renewable energy assets and natural gas power plants.
When oil prices rise, there will be higher demand for other energy substitutes such as natural gas and renewable energy.
This demand will drive revenue growth for its infrastructure segment.
Keppel is also poised to capture this trend as it plans to expand Singapore’s power generation from 1.5 GW to 3 GW by 2030.
Furthermore, Keppel announced its Vision 2030 strategy back in 2020.
It plans to restructure its portfolio by divesting existing assets to expand its renewable energy segment by 2030.
Moreover, the company is planning to monetise the remaining of its vendor notes in marine assets like AssetCo.
AssetCo is an entity set up by Keppel to hold its offshore and marine legacy assets such as oil rigs.
According to Morningstar’s report, analysts estimated a fair value of S$8.60 for Keppel’s share price.
As of 13 June 2025, this is an upside of 19.1% at the current share price of S$7.22.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp is a Singapore-based energy supplier and urban development company.
For its financial year ending on 31 December 2024, Sembcorp supplies power to one-third of Singapore’s data centres.
The increase in oil prices is strongly beneficial for Sembcorp with its strong foothold in alternative energy segments.
In 2024, Sembcorp acquired 30% of Senko Energy, expanding its capacity to supply power.
The company also reported a 600MW hydrogen-ready gas fired power plant which will be completed by the end of 2026.
This power plant consists of a multi-utilities centre to supply energy from numerous sources which are substitutes of oil.
An increase in oil prices will then lead to a margin expansion for Sembcorp’s gas-powered business segments.
In 2024, Sembcorp reported a 4.1 GW renewables capacity growth from the end of 2023 to 17 GW, moving towards a target of 25 GW by 2028.
Additionally, 51% of gas-powered contracts have more than 10 years in their tenure.
This signals margin security as fixed-long term contracts insulate earnings from short-term volatility while still locking in the oil-linked upswing.
Get Smart: Sustainable growth
There is no guarantee that oil prices will remain elevated.
Obviously, no one should be hoping for more conflicts to drive prices higher.
Instead, investors should seek sustainable trends that drive energy demand higher.
For instance, artificial intelligence usage is expected to sustain energy growth over the long term.
If demand remains high, then energy stocks could benefit in turn.
We’ve found 5 SGX-listed dividend stocks with strong track records in turbulent markets. If you want consistency in an uncertain world, start here.
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Disclosure: Gabriel Lim does not own shares of any of the companies mentioned.
