Morgan Stanley estimates that dividend payments among Thai refiners will triple by 2026, following a doubling in recent years. The bank attributes the surge to excess cash flows generated from higher refining margins and reduced debt levels, with refiners distributing only about 16% of first-half 2026 cash flows as dividends.
The investment bank projects medium-term gross refining margins will stabilize around 30% above historical mid-cycle averages after a robust second quarter of 2026. This outlook reflects tighter global fuel inventories, which have fallen to their lowest levels since 2022, alongside limited capacity additions and refinery closures that continue to constrain product markets.
Thai refiners are prioritizing debt reduction and moderating capital expenditure needs, enabling them to return more cash to shareholders. Morgan Stanley expects annual refining margins to remain above historical averages despite potential short-term volatility and normalization from current highs.
