Global Refining: Asia Pacific: The Bull vs. Bear Debate on "Golden Age"

Fuel refinery equities continue to be debated as energy market tightness shows up in freight, oil and government policies. We debate the bull vs. bear arguments as we navigate this Golden Age in fuel markets and highlight what to own and avoid in MS global coverage. Bulls argue underinvestment in refining, slippages in capacity adds and overdone concerns on long-term demand have set the stage for the refining up-cycle to inflect into a golden age until 2030, with new refineries taking 10+ years to complete outside China and payback at 16 years. Bears point to tanker freight rates that have risen threefold since February 2026, pushing refinery gross margins below cash cost for some, the return of Russian supply with normalised exports assumed in 2H27, and risks of demand destruction.