Pocket Option - Oil and gas stocks: Opportunities and challenges 2025
The Vietnamese oil and gas stock market is opening up attractive investment opportunities against the backdrop of global oil price fluctuations and energy transition trends. This article provides an in-depth analysis of factors affecting oil and gas stocks, offering practical investment strategies and essential knowledge to help Vietnamese investors make smart investment decisions ahead of 2025.
Overview of Vietnam's oil and gas sector stocks in 2025
Oil and gas stocks in Vietnam are undergoing a strong transition, with complex fluctuations due to the dual impact from global markets and domestic characteristics. In fact, Vietnamese oil and gas companies not only face global oil price volatility but must also adapt to the national energy transition strategy aimed at achieving Net Zero emissions by 2050.
The oil and gas stock group in Vietnam includes companies across the value chain from exploration and production (PVD, CNG), transportation (PVT), processing (BSR, OIL) to distribution (GAS, PLX). Notably, many of these companies are subsidiaries of Vietnam National Oil and Gas Group (PVN) - a state-owned economic group with a strategic role in the economy.
According to data from the Pocket Option trading platform, in the first 6 months of 2023, many oil and gas stocks recorded superior growth compared to the VN-Index. Specifically, GAS increased by 18.2%, PVD by 21.5%, while PVS recorded a 15.3% increase. However, from late 2023 to early 2024, price movements showed strong differentiation, reflecting the industry's characteristic cyclicality.
In-depth analysis of factors governing Vietnamese oil and gas stocks
To successfully invest in oil and gas stocks, Vietnamese investors need to thoroughly understand the specific factors affecting this stock group - beyond general stock market analyses.
Global oil price fluctuations - Direct and non-uniform impact
Brent and WTI oil prices are the most important factors affecting oil and gas stocks, but the degree of influence is not uniform for all companies in the industry. Analysis of data from the past 5 years shows that the correlation coefficient between oil prices and oil and gas stocks in Vietnam ranges from 0.65 to 0.88 - much higher than the market average of 0.42.
| Oil price level | Impact on exploration and production companies | Impact on processing and distribution companies | Common impact lag |
|---|---|---|---|
| Below 60 USD/barrel | Very negative, 60-70% profit reduction, new project postponement | Short-term negative, long-term positive due to lower input costs | 1-2 quarters for financial results |
| 60-80 USD/barrel | Balanced, ROIC fluctuating between 8-12% | Neutral, stable profit margins | 1 quarter for financial results |
| 80-100 USD/barrel | Positive, 30-40% profit increase, increased exploration | Neutral to negative due to price control pressure | 1-2 months for stock prices |
| Above 100 USD/barrel | Very positive short-term, potential long-term risks | Negative, especially for PLX, BSR due to Government pressure | Immediate for stock prices |
According to exclusive analysis from Pocket Option experts, an often overlooked point is the lag of oil price impacts on Vietnamese oil and gas stocks. Specifically, for extraction companies like PVD, oil price fluctuations typically affect stock prices 2-3 months faster than actual business results - creating profit opportunities for investors who understand the industry.
Vietnam's energy policy - A key factor rarely analyzed
Unlike developed markets, oil and gas stocks in Vietnam are heavily influenced by Government policies. This is a distinctive point often overlooked by foreign investors, but a decisive factor for domestic investors.
- Power Development Plan VIII and National Energy Development Strategy: direction to gradually reduce coal-fired thermal power, increase the proportion of gas and renewable energy
- Petroleum price management mechanism: adjustment frequency of 10 days/time, maximum adjustment range of 10%
- Environmental protection tax on petroleum: currently at 4,000 VND/liter of gasoline, expected to increase to 5,000 VND/liter from 2026
- Equitization roadmap for state-owned oil and gas enterprises: expected to accelerate during 2025-2030
According to Pocket Option's assessment, "The policy factor creates both unique risks and opportunities for Vietnamese investors. Those who grasp policy change information early from official sources such as the Ministry of Industry and Trade and the State Securities Commission can gain a significant advantage over passive investors."
Detailed analysis of leading oil and gas stock codes in Vietnam
When investing in oil and gas stocks, understanding the characteristics, strengths-weaknesses, and prospects of each business is extremely important. Below is an in-depth analysis of representative stock codes:
| Stock Code | Sector | Competitive Advantage | Challenges | Notable Financial Indicators (Q2/2024) | 2025 Potential |
|---|---|---|---|---|---|
| GAS | Gas transportation and distribution | Pipeline monopoly, long-term contracts with power plants | Declining domestic natural gas production | ROE: 18.7%, P/E: 16.8x, Dividend yield: 5.2% | Positive due to LNG Thi Vai expansion project |
| PLX | Petroleum distribution | 50% market share, 5,500 gas stations nationwide | Low profit margin (1.8-2.2%), price control pressure | ROE: 11.5%, P/E: 12.3x, Dividend yield: 6.7% | Stable with potential from non-petroleum segment |
| PVD | Drilling services | Modern rig fleet, international contracts | Heavy dependence on oil prices and exploration activities | ROE: 3.8%, P/E: 38.2x, Debt/equity ratio: 24% | Strong recovery if oil prices remain above 80 USD |
| PVS | Oil and gas technical services | M&C capabilities, diverse project portfolio | Competition from international competitors in Southeast Asian market | ROE: 9.2%, P/E: 14.5x, Net cash: 5,200 billion VND | Positive due to new projects B Block, White Lion |
| BSR | Oil refining | Vietnam's largest refinery (148,000 barrels/day) | Crack spread volatility, high operating costs | ROE: 7.2%, P/E: 9.8x, Debt/EBITDA: 2.8x | Challenging due to competitive pressure from imports |
A bold perspective from Pocket Option: "Contrary to popular belief, oil and gas stocks considered 'blue-chips' like GAS, PLX may not be the optimal choice for the 2025-2026 period. Instead, midcap stocks with more attractive valuations like POS, PVB may provide superior returns due to their ability to flexibly leverage new projects in the upcoming public investment cycle."
Practical investment strategies for Vietnamese oil and gas stocks
Not just theory, this section provides practical and detailed investment strategies, distilled from the experience of Pocket Option experts and successful investors.
The 4C method for oil and gas stock investment
In Vietnam, the 4C method (Cycle - Cost - Chinh sach [Policy] - Chất lượng [Quality]) has proven superior effectiveness when investing in oil and gas stocks:
- Cycle: Identify the current position in the oil price cycle and industry investment cycle. The 2025-2026 period is likely to be mid-cycle - suitable for selective investment strategies
- Cost: Evaluate the cost structure and optimization ability of businesses. For example, PVS with fixed costs 15% lower than the industry average has faster recovery potential when the market improves
- Policy: Analyze the impact of new policies such as Power Plan VIII, energy transition strategy on specific businesses
- Quality: Assess governance quality, capital use efficiency, and adaptability of leadership
| Cycle stage | General strategy | Specific examples in Vietnam | Most recent time period |
|---|---|---|---|
| Cycle bottom | Accumulate stocks with strong financial foundation | Buy GAS, PVS when oil prices are below 55 USD/barrel | Q2/2020, Q4/2022 |
| Early cycle recovery | Increase proportion of exploration and service stocks | Buy PVD, PVS when rig rental rates increase | Q1/2021, Q1/2023 |
| Mid-cycle | Balance portfolio, selective based on business results | Balance between GAS, PLX, PVS according to quarterly prospects | Q3-Q4/2023 |
| Cycle peak | Gradually take profit, switch to defensive stocks | Sell PVD, keep part of GAS when oil prices exceed 90 USD | Q2/2022 |
A successful investment strategy from a Vietnamese investor recorded by Pocket Option: "Allocating 70% of resources to 2-3 leading oil and gas stocks when the market is overly pessimistic (oil below 60 USD), and gradually shifting 50% to defensive stocks in other sectors when oil prices exceed 85 USD yielded a 78% return in the 2020-2022 cycle, compared to a 42% increase in the VN-Index."
In-depth financial analysis for oil and gas stock investors
For the oil and gas stock group, besides conventional financial indicators, attention should be paid to some specialized indicators that help properly assess corporate value in the specific context of the industry:
| Financial Indicator | Specific meaning for oil and gas stocks | Benchmark for Vietnamese market | Practical application |
|---|---|---|---|
| EV/2P Reserves | Enterprise valuation compared to proven reserves (especially for PVS) | 5-8 USD/barrel oil equivalent | Compare with regional average of 10-15 USD/barrel |
| Crack Spread | Difference between crude oil and refined product prices (important for BSR) | 7-12 USD/barrel is ideal | Monitor weekly developments to forecast profits |
| Capex/Depreciation | Assessment of investment level compared to depreciation, reflecting growth prospects | Above 1.2x indicates expansion investment | Ratio below 0.8x warns of excessive investment cuts |
| FCF Yield | Free cash flow/market cap ratio, important in capital-intensive industry | Above 8% is considered attractive | Prioritize businesses with high FCF Yield + low leverage |
| Realized Price | Actual selling price compared to market price (GAS, PVG) | Discount below 10% compared to market price | Assess negotiating ability with partners |
A unique perspective from Pocket Option: "Many Vietnamese investors often overlook the ROACE (Return on Average Capital Employed) indicator when analyzing oil and gas stocks. However, this is one of the most important indicators reflecting long-term capital use efficiency - a vital factor in capital-intensive industries like oil and gas. Companies with ROACE above 12% like GAS typically deliver superior long-term value."
Rarely mentioned risks when investing in Vietnamese oil and gas stocks
Besides obvious risks like oil price volatility, investors should note some unique risks in the Vietnamese market that even in-depth analyses often overlook:
| Specific risk | Potential impact | Companies easily affected | Mitigation measures |
|---|---|---|---|
| Changes in resource tax calculation mechanism | Increased extraction costs, 10-20% reduction in profit margins | PVS, PVD, CNG | Monitor draft amendments to Petroleum Law, establish selling price thresholds |
| South China Sea sovereignty disputes | Delay/cancellation of exploration and extraction projects in disputed areas | PVD, PVS, PVC | Diversify project portfolio by geographic region |
| Pressure to "go green" from international investors | Difficulty raising capital, lower valuation | PLX, BSR, OIL | Prioritize companies with clear ESG roadmaps |
| Restructuring of PVN and member units | Changes in governance model, subsidiary division/merger | Entire PVN ecosystem | Analyze information from AGMs, quarterly financial reports |
| Lack of transparency in internal transfer pricing mechanism | Unpredictable profit fluctuations | GAS, PVGas City, PV Power | Focus on companies with transparent, market-based pricing mechanisms |
Pocket Option recommends: "Investors should build a 'safety buffer' when investing in Vietnamese oil and gas stocks, including: (1) Not exceeding 20% of total investment portfolio; (2) Allocating to at least 3-4 stocks in different segments of the value chain; (3) Establishing clear stop-loss thresholds, typically 15% from purchase price; and (4) Maintaining a cash ratio of 30-40% during periods of strong oil price volatility."
Development trends of Vietnam's oil and gas industry and new investment opportunities
The oil and gas stock group in Vietnam is facing many important transformation trends, creating both challenges and new investment opportunities. These changes come not only from oil price fluctuations but also from the national energy transition strategy:
- Shift from oil to gas: With gas demand projected to increase 150% by 2030, gas projects like Nam Con Son 2, Block B, Blue Whale will create growth momentum for GAS, PVS
- LNG infrastructure development: Vietnam aims to increase LNG import capacity to 8 million tons/year by 2030, opening major opportunities for terminal investment projects, port warehouses and gas power plants
- Restructuring for improved efficiency: PVN and member units are on a comprehensive restructuring roadmap, divesting from non-core areas, focusing on key projects
- Expanding investments abroad: Companies like PVD, PTSC are actively seeking opportunities to provide services in Southeast Asian and Middle Eastern markets
- Digital transformation in operations management: Applying IoT, AI, big data technologies in asset management and operations helps optimize costs by 15-20%
| New trend | Benefiting companies | Companies facing challenges | Time of clear impact |
|---|---|---|---|
| LNG development, gas infrastructure | GAS (+25-30% revenue), PV Power, PVGas City | Pure oil extraction companies | 2025-2027 |
| Green energy transition | PV Power (with wind, solar projects), GAS | BSR, OIL, PLC if no transition strategy | 2026-2030 |
| Expanding deep-water exploration | PVD (rig rental prices up 30-40%), PTSC, PVS | Companies focusing on traditional fields | 2025-2028 |
| PVN restructuring | PVS, PVGas City (equitization), POW | Inefficient operating units (PVC, PVB) | 2025-2026 |
| Digital technology application | GAS, PLX (with digital payment applications), PVS | Companies slow to digitally transform | 2024-2026 |
A controversial view from Pocket Option: "Many investors still overvalue pure oil stocks and haven't sufficiently recognized the impact of energy transition trends. In reality, Vietnam National Oil and Gas Group's market capitalization in the next 10 years may come more from the gas and green energy segments than from traditional oil extraction activities. This requires investors to have a long-term vision when selecting oil and gas stocks."
Conclusion and practical investment recommendations
Oil and gas stocks in Vietnam, despite strong cyclical fluctuations, remain a potential investment choice for knowledgeable investors. With the current context of energy transition and macroeconomic volatility, smart investment strategies need to combine fundamental analysis, technical analysis, and early identification of industry trends.
Based on comprehensive analysis, Pocket Option offers some specific investment recommendations:
- Portfolio allocation: Limit oil and gas stock weight to no more than 15-20% of total portfolio, with a combination of upstream (PVD, PVS), midstream (PVT, GAS) and downstream (PLX, BSR) stocks
- Timing selection: Apply counter-cyclical investment strategy - buy when oil prices drop sharply below 65 USD/barrel and the VNEnergy index declines more than 20% from its most recent peak
- Company selection: Prioritize companies with debt/equity ratios below 30%, ROE above 12%, with clear green transition strategies
- Risk management: Set stop-loss thresholds of 15-20% and profit targets of 30-40% for each transaction
- Information updates: Closely monitor world oil price developments, domestic energy policies and quarterly financial reports
In the next 12 months, GAS remains a good defensive choice with an attractive dividend yield of 5-6%, while PVS may offer higher growth potential thanks to its diverse project portfolio and LNG development prospects. For risk-loving investors, PVD is worth considering when oil prices stabilize above the 75 USD/barrel threshold.
Looking further ahead, the shift from oil to gas and renewable energy will reshape Vietnam's oil and gas industry structure. Smart investors need to prepare for this transition by thoroughly researching LNG, gas, and green energy projects that companies in the industry are implementing.
Oil and gas stocks will continue to be an important part of a diversified investment strategy. However, success in this field depends on the ability to analyze deeply, grasp trends and manage risk effectively - factors that Pocket Option always strives to support Vietnamese investors through in-depth analysis tools and information.