Middle East tensions weigh on Vietnam’s stock market outlook

Rising geopolitical tensions in the Middle East have pushed global oil prices sharply higher, exceeding $100 per barrel on Thursday, raising concerns about inflationary pressures and potential negative impacts on Vietnam’s stock market.

According to analysts, the surge in oil prices could affect the macroeconomic outlook and investor sentiment, adding pressure to domestic equities.

Oil supply disruption and inflation risks

Investment firm SGI Capital said disruptions affecting about 20% of global oil supply have pushed crude prices toward $100 per barrel (over $100 on Tuesday, March 12). If sustained, this could fuel inflation globally.

The firm estimates that every 10% increase in oil prices could raise inflation by about 0.3 percentage points while reducing GDP growth by 0.3-0.7 percentage points in major oil-importing economies.

For Vietnam, the impact would largely come from higher fuel prices and related goods. The country imports roughly 50% of its crude oil, about 70% of LPG and all of its LNG from the Middle East to produce gasoline, petrochemical products, and electricity.

If the conflict lasts longer than a month, short-term supply shortages could affect refineries and disrupt sectors such as transportation, logistics, and energy. However, analysts believe these disruptions would likely remain temporary as supply routes eventually stabilize.

SGI Capital also noted that Vietnam’s economy is entering a phase of tightening liquidity and rising interest rates toward the end of a credit-easing cycle. Combined with external pressures from surging oil prices, the environment could become less favorable for highly leveraged markets such as stocks and real estate.

Pressure on inflation, interest rates and exchange rates

Ho Sy Hoa, director of research and investment advisory at DNSE Securities, said if oil prices sustain at around $85 per barrel in the near term - about 30% higher than the 2025 average of roughly $67 - it could significantly pressure energy security.

Higher oil prices would also increase inflation risks and limit the flexibility of monetary policy.

Under such circumstances, macroeconomic conditions could become less supportive for equities. Banking system liquidity could also face pressure due to government treasury balances deposited at commercial banks and slower deposit growth early in the year.

Meanwhile, Nguyen The Minh, head of research and development at Yuanta Securities Vietnam, expects the inflationary impact to be temporary, noting that Middle East tensions often end relatively quickly and oil prices typically cool after sharp spikes.

However, he warned that a prolonged escalation could disrupt oil supply chains and trigger cost-push inflation similar to the surge seen in 2022. That scenario could complicate domestic monetary policy and increase pressure on the USD/VND exchange rate, which would negatively affect emerging markets including Vietnam.

Analysts at BIDV Securities (BSC) said that if tensions between the United States and Iran last four to six weeks and Brent crude trades between $80 and $100 per barrel, the Federal Reserve could delay interest-rate cuts.

In that case, inflation in Vietnam could rise moderately to around 3.5-3.6% year-on-year, and the State Bank of Vietnam might raise policy rates by 0.25–0.5 percentage points.

Market reaction and sectoral impact

Concerns about oil supply disruptions and inflation have already weighed on the market. The benchmark VN-Index plunged more than 115 points in the March 9 session before partially recovering in the following two trading days (Tuesday and Wednesday).

The reaction has not been limited to Vietnam, as many emerging market stocks - highly sensitive to the U.S. dollar, inflation and growth prospects - have also declined over the past month.

Analysts say the impact of rising oil prices will vary across sectors.

BSC expects oil and gas stocks such as GAS, PVS, PVD, and BSR to benefit directly from higher energy prices.

Fertilizer producers may also gain if the conflict prolongs and pushes up natural gas and urea prices, while shipping companies could benefit from higher freight rates and oil prices which raise their revenue.

Hydropower companies could see short-term gains as electricity market prices rise, while thermal power producers may face higher fuel costs.

On the downside, sectors likely to be negatively affected include tire manufacturing, aviation, export-oriented industries, consumer retail, and banking.

Analysts at Vietcombank Securities (VCBS) also view natural rubber companies such as PHR, DPR, and GVR positively. Rising oil prices could increase the cost of synthetic rubber, making natural rubber more competitive and potentially boosting profit margins for these companies in 2026.

Meanwhile, the real estate sector could face negative impacts as higher oil prices may drive inflation and exchange rate pressures, keeping borrowing costs elevated. Higher interest rates - especially for property loans - could weigh on developers’ financial positions and slow property sales absorption rates.

After four consecutive days of sharp increases, RON95-III gasoline prices have fallen sharply to just over VND25,000 ($0.95)/liter, and E5 RON92 gasoline to just over VND22,000/liter. Diesel prices have also been significantly reduced.

On the evening of March 11, the Ministry of Industry and Trade and the Ministry of Finance decided to adjust retail gasoline and diesel prices.

Accordingly, from 10 p.m, the price of RON95-III gasoline was reduced by VND3,880 ($0.15)/liter compared to the current base price, with the retail price not exceeding VND25,240/liter.

Similarly, the price of E5 RON92 gasoline decreased by VND3,619/liter, with the selling price not exceeding VND22,951/liter.

The price of 0.05S diesel was adjusted down by VND4,247/liter, with the selling price at VND26,470/liter.

Meanwhile, the price of kerosene was adjusted down by VND7,966/liter compared to the current level, with the retail price at VND24,419/liter.

Fuel oil prices also decreased by VND5,706/kg, selling at VND19,001/kg.

Thus, domestic gasoline prices have reversed course and are now falling after four consecutive days of sharp increases.