Thai refiners are poised to significantly boost shareholder returns, with dividend payouts projected to triple by 2026 as companies distribute excess profits following debt reduction. The increase follows a twofold rise in dividends already observed, according to Morgan Stanley.
The investment bank attributes the dividend growth to strong refining margins driven by tight global fuel inventories, which have fallen to 2022 lows. Limited capacity additions, refinery closures, and high utilization rates have kept product markets tight, supporting margins. Morgan Stanley expects the current upcycle to extend beyond market estimates, with annual refining margins remaining above historical averages despite expected quarterly volatility.
Medium-term gross refining margins are forecast to settle roughly 30% above previous mid-cycle averages after a strong second quarter in 2026. Thai refiners have distributed only about 16% of first-half 2026 cash flows on average, indicating substantial retained earnings available for further dividend increases or debt reduction.
