You must have seen the headlines: oil prices have surged past US$100 per barrel following the recent escalations in the Middle East.
If you’re a car owner, you are probably feeling the pinch of higher petrol prices at the pumps.
For investors, the effect is similar: when oil prices spike, the impact ripples through industries quickly.
Some industries – especially oil and gas producers and offshore service providers – may benefit from higher prices, while others that rely on oil as an integral part of their operations, such as airlines and shipping, might feel the impact of higher costs and reduced profit margins.
A period of elevated oil prices often leads to price increases across a wide range of goods and services.
Furthermore, this could put upward pressure on bond yields, which in turn could lead to higher interest rates and ultimately cause macroeconomic volatility.
Stock valuations can also come under pressure – reminiscent of the market turbulence seen in 2022-2023.
Having established that, let’s take a look at some local companies that will be affected (both positively and negatively) by higher oil prices.
Marco Polo Marine Limited (SGX: 5LY), or MPM – Surfing the Wave of Higher Oil Prices
MPM is a prime beneficiary of higher oil prices.
As oil prices stay elevated, the group benefits from increased pricing power (higher charter rates) and stronger demand (higher fleet utilisation rates) for its fleet of offshore vessels (OSVs), which primarily provide logistics and operational support to the offshore oil & gas and renewable energy sectors.
In its first quarter of fiscal year 2026 (1QFY2026), the group’s revenue surged 27% year-on-year (YoY) to S$32.8 million, while gross profit jumped 32% to S$14.0 million.
This growth was underpinned by higher fleet utilisation, which improved to 76% (up from 71% a year ago), and a significant rise in average charter rates.
The group’s shipyard business may see a boost, driven by new contracts to construct OSVs – a trend already evidenced by the group’s record shipbuilding order book seen in early 2026.
Additionally, the group’s renewables segment acts as a strategic hedge.
This allows MPM to benefit as the energy transition trend gains momentum to counteract the effects of higher oil prices.
The company is already seeing strong operational momentum in this segment; its flagship vessel, MP Wind Archer, recently won the “Offshore Energy Vessel of the Year 2026” award and is currently supporting offshore wind operations in North Asia under a long-term contract.
Here is the key takeaway: higher oil prices benefit MPM through its traditional oil and gas exposure, while its pivot into renewables provides a powerful secondary growth engine and enhanced earnings visibility.
Singapore Airlines Limited (SGX: C6L), or SIA – Double Whammy of Higher Costs and Softer Demand
SIA is often seen as the primary casualty of surging higher oil prices.
Fuel is the single largest cost component for the airline; in its latest quarter ending December 2025 (3QFY2025/2026), net fuel cost rose 3.6% YoY to S$1.36 billion, accounting for approximately 24.7% of total revenue.
To mitigate this, SIA maintains a robust hedging strategy, typically covering about 50% of its fuel over the next three months.
While this provides a cushion, it does not fully insulate the carrier from the recent spike above US$100.
Beyond direct costs, sustained oil prices threaten to dampen travel demand.
As energy-driven inflation raises the cost of living, consumers often pull back on discretionary spending like travel.
However, SIA’s latest operating statistics for February 2026 show surprising resilience; the group carried 3.3 million passengers, a 7.2% increase over the previous year, bolstered by the shift of the Chinese New Year holidays into February.
Yet, the long-term outlook remains a balancing act.
This “double whammy” of rising fuel expenditure and the potential for softer demand in the coming months will continue to pressure the group’s industry-leading margins.
While SIA’s moat and hedging provide some protection, it remains one of the stocks most sensitive to energy prices.
Investors should closely watch for any dip in the Passenger Load Factor (which sat at 85.6% in February) as a sign that high prices are finally starting to bite.
DBS Group Holdings Limited (SGX: D05), or DBS – Possible Increase of Non-Performing Loans
The last company on this list is the banking powerhouse, DBS.
Typically, when oil prices spike and remain elevated, the resulting inflationary pressure can hamper corporate earnings across the broader economy.
This can directly impact the ability of businesses to service their debts, potentially leading to a rise in non-performing loans (NPLs) for DBS, and a contraction in bank earnings.
Investors may remember the shale oil crisis a decade ago, when Singapore banks faced significant headwinds due to their heavy exposure to the oil and gas (O&G) support services sector.
While DBS has since significantly diversified its loan book, any broad economic softening could still pressure its diversified portfolio.
However, DBS enters this volatile 2026 period with a resilient balance sheet.
As of the end of FY2025, the bank’s NPL ratio remained stable at 1.0%, and held a robust allowance coverage of 130% (rising to 197% when considering collateral).
While investors have been advised to “buckle up” for a volatile 2026, the bank’s proactive hedging and record S$488 billion in assets under management (AUM) provide a significant buffer against macroeconomic shocks.
While cyclical stocks like banks are sensitive to energy-driven downturns, DBS’s shift towards fee-income and its massive capital buffers make it better equipped to handle an oil-led slowdown than in previous cycles.
Investors should monitor the bank’s next quarter results (expected in late April) for any early signs of credit stress in the SME or manufacturing segments.
Get Smart: Follow the Ripple Effects
With Brent crude crossing US$100, the primary variable remains the geopolitical stability of the Strait of Hormuz (a critical passageway for 20% of the global supply of seaborne oil).
However, oil is merely the first domino.
Investors must track the ripple effects: specifically, whether energy-driven inflation triggers a fresh spike in bond yields and interest rates.
While high prices are a tailwind for names like MPM, they represent dual headwinds for SIA’s margins and potential credit stress for DBS.
By monitoring how your portfolio companies manage these shifting costs, you can turn macroeconomic volatility into a calculated investment opportunity.
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Disclosure: Wilson.H does not own shares in any of the companies mentioned.
