48 WASCO BERHAD SECTION 3 VALUE CREATION 2026 MARKET OUTLOOK Navigating Opportunity and Uncertainty in an Evolving Energy Landscape Wasco enters 2026 from a position of strength: a net cash balance sheet, an order book of RM2.8 billion, and a newly listed bioenergy platform in Wasco Greenergy. For the first time, the Group’s order book is majority-weighted toward Energy Transition and Green projects. The strategic transformation initiated several years ago has resulted in a fundamentally different Wasco. The focus for 2026 is therefore no longer validation of the strategy, but disciplined execution within a more complex external environment, shaped primarily by the evolving Middle East conflict and its implications for global energy markets. THE MIDDLE EAST CONFLICT: SCENARIO ANALYSIS AND ENERGY MARKET IMPLICATIONS The escalation of the Israel-Iran conflict into active military exchanges, culminating in the February 2026 strikes on Iranian military and nuclear infrastructure by the United States and Israel, has placed the Strait of Hormuz at the centre of global energy market risk. Approximately 20% of global oil supply and 35% of seaborne oil trade transit through this 21-mile chokepoint daily. The key market variable entering 2026 is the pace and durability of any ceasefire, and whether physical tanker flows through the Strait can be restored in an orderly and sustained manner. Given the central role of the Strait of Hormuz in global energy trade, the evolution of the Middle East conflict represents the most significant external variable shaping the global energy market outlook for 2026. Scenario Timeframe Probability Oil Price Range Impact on Global Capex Impact on Wasco Baseline: Ceasefire holds, Strait of Hormuz flows normalise Weeks to Months Most likely Brent USD 75–90/bbl Moderate positive. FID activity sustained; Middle East capex programmes continue uninterrupted. Favourable. Engineering and Fabrication and Pipeline Services order books progress on schedule; bioenergy growth continues. Elevated tension: Intermittent disruptions, partial reduction in Hormuz flows Several Months Possible Brent USD 90–105/bbl Mixed. Higher prices support FID economics outside the region; Middle East execution risk rises. Manageable. Geographic diversification buffers impact; non-Middle East orders accelerate. Severe escalation: Sustained Strait of Hormuz closure (weeks or more) Several Months or Longer Tail risk Brent USD 100–110+/bbl Highly disruptive nearterm. Supply chain disruption; project delays in the region. Longer term, redirects investment to alternative corridors. Near-term project risk in the Middle East; partially offset by accelerated order intake in Europe, West Africa, and Southeast Asia. Sources: Goldman Sachs, Wood Mackenzie, Rystad Energy, HSBC – scenario analyses published Q1 2026. Regardless of which scenario ultimately unfolds, the underlying investment drivers across global energy infrastructure remain intact. NOCs continue to prioritise energy supply security, energy transition projects are progressing across multiple jurisdictions, and industrial decarbonisation initiatives continue to accelerate. The primary question for 2026 is therefore not whether investment will continue, but how its geographic distribution and timing will evolve. KEY MARKET TRENDS
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