Iran War Slashes Earnings of Philippine, Thai Firms by 26%
5h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
strait-of-hormuzenergy-commodities
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Financial analysts project a 26% average downgrade to corporate earnings for publicly listed firms in the Philippines and Thailand, according to market data aggregated by Fazen Markets on 18 June 2026. This marks the sharpest forecast cut in Southeast Asia, driven by the ongoing regional conflict in the Middle East that has closed the Strait of Hormuz, choking a primary maritime route for global oil and gas shipments. The supply shock poses a direct threat to two of the region’s most import-dependent economies.
The Strait of Hormuz is a critical global chokepoint, historically facilitating the transit of roughly 21 million barrels of oil per day, or about 21% of global consumption. Its closure is a rare but high-impact geopolitical event. The last comparable disruption occurred in 2019 with attacks on tankers and the seizure of a British-flagged vessel, which briefly spiked Brent crude prices by 15% over two weeks.
The current macro backdrop features elevated baseline energy prices, with Brent crude trading near $92 per barrel before the closure announcement. Regional central banks, including the Bank of Thailand, have maintained a hawkish stance to combat persistent inflation, limiting fiscal and monetary policy flexibility to counter the shock.
The direct catalyst is the physical blockade of the strait as a tactical element of the Iran conflict, which began in late May 2026. This immediately severed the shortest sea route for Gulf oil exports to Asia, forcing a rerouting of tankers around the Cape of Good Hope. The extended voyage length of approximately 15 additional days has created a sudden, severe physical shortage and a freight rate surge, hitting Asian importers hardest and fastest.
Earnings revision breadth for the Philippine Stock Exchange Index (PSEI) turned deeply negative, with 78% of constituent companies receiving downward EPS adjustments for the current fiscal year. For Thailand’s SET Index, the figure is 71%. The aggregate earnings per share (EPS) forecast for the PSEI has been cut by 26.1% since the start of June, while the SET Index has seen a 25.8% reduction.
A comparative view illustrates the disparity within Southeast Asia. Malaysia’s KLCI, a net energy exporter, shows a modest 3% EPS upgrade. Indonesia’s JCI, also a commodity producer, faces only a 5% downgrade. Singapore’s STI, though an importer, benefits from its status as a regional trading and refining hub, limiting its forecast cut to 12%.
| Market | EPS Revision (Since 1 June) | Key Pressure Point |
|---|---|---|
| Philippines (PSEI) | -26.1% | Consumer Discretionary, Transport |
| Thailand (SET) | -25.8% | Petrochemicals, Airlines, Logistics |
| Singapore (STI) | -12.0% | Shipping, Refining (mixed) |
| Vietnam (VN-Index) | -18.0% | Manufacturing, Input Costs |
Freight rates for Very Large Crude Carriers (VLCCs) on the Middle East-to-Asia route have jumped 320% week-over-week to Worldscale 280. This translates to an added cost of over $12 per barrel for delivered crude, compressing refinery margins for those without captive supply.
The downgrades reveal clear sectoral winners and losers. Major losers include Philippine conglomerates with large consumer retail and airline exposure, such as JG Summit and Cebu Air, facing projected profit declines of 30-40% on soaring input and fuel costs. In Thailand, the petrochemical giant PTT Global Chemical is highly vulnerable, with analysts modeling a 35% drop in EBITDA due to crippled feedstock margins.
Beneficiaries within the turmoil are more niche. Regional liquefied natural gas (LNG) exporters like Malaysia’s Petronas see increased pricing power. Singaporean shipyard and offshore marine service providers like Seatrium are witnessing a surge in inquiries for floating storage units. Domestic energy producers in the Philippines, such as Phinma Energy, are experiencing a re-rating as the crisis highlights domestic resource value.
A key counter-argument is that markets may have overestimated the duration of the strait’s closure, pricing in a permanent shock for what could be a weeks-long disruption. A swift diplomatic or military resolution would trigger a violent reversal in oil prices and a relief rally in the most battered consumer stocks. Current positioning data from prime broker flows shows institutional investors are net short Thai airlines and Philippine consumer discretionary ETFs while building long positions in ASEAN energy producers and Singaporean maritime service stocks.
Immediate catalysts include the 25 June OPEC+ emergency meeting, where announced production increases could partially offset the logistical shortfall. The 10 July release of June inflation prints for the Philippines and Thailand will quantify the initial consumer price impact and dictate central bank responses.
Key technical levels to monitor are the PSEI’s support at 6,200, a level not breached since 2023, and the SET Index’s 1,350 support. A sustained break below these on weekly closes would signal a deeper earnings derating cycle. For oil, sustained trade above $110 per barrel for Brent would confirm the physical market is pricing in a prolonged disruption.
Market direction hinges on the strait’s operational status. Any verified transit of a commercial tanker through the channel with naval escort would signal a potential breakthrough and likely catalyze a sharp risk-on move across ASEAN equities. Conversely, the announcement of a prolonged naval mining campaign would extend the crisis timeline.
The 2021 Suez Canal blockage by the Ever Given lasted six days and disrupted container shipping and some oil products, causing estimated daily trade losses of $9.6 billion. The Hormuz closure is a deliberate military action affecting a far more critical artery for crude oil, with no clear resolution timeline. The current event’s impact is more severe, targeted, and integrated into broader regional conflict, posing sustained inflationary pressure rather than a temporary logistical snarl.
Retail investors in broad ASEAN or country-specific equity funds are exposed to significant near-term volatility and potential capital depreciation. Funds heavy in Philippine and Thai holdings will see net asset values pressured. Investors should review fund fact sheets to understand sector allocations, as funds overweight energy may mitigate losses. This is a period for risk reassessment, not necessarily immediate exit, given the potential for a sharp rebound on geopolitical developments.
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