Viva Energy Shares Bounce as Investors Weigh Geelong Refinery Windfall Against Sharp Oil Price Retreat

SYDNEY — Shares of Viva Energy Group Ltd. rose more than 3% on Wednesday, recovering part of a recent slide as investors balanced strong refining margins at its Geelong refinery against volatile oil prices and lingering damage from a fire earlier this year.

Viva shares gained 9 cents, or 3.33%, to A$2.79 in afternoon trade, closing in on the session high. Nearly 3 million shares changed hands, the heaviest volume among the market's leading gainers, and the stock is up about 54% over the past year.

The rebound came on a weak day for the broader market. The S&P/ASX 200 fell 0.71% to 8,823.40 shortly after the open, though energy was among the few sectors trading higher, gaining 0.6%.

Recent pullback

The gain followed a difficult stretch. Viva shares were trading at A$2.75 on Tuesday morning, down 4.8%. The stock had traded at A$3.17 in mid-October after pushing to its strongest level in years following a record interim result.

Oil markets have been volatile. Prices were choppy on Wednesday after sliding to a four-week low in the previous session as investors weighed talks to end the wars in Ukraine and Iran against fears that recent attacks could further disrupt supplies. Brent crude futures were up 0.8% at $104.47 a barrel around midday.

Refining margins surge

Viva's third-quarter update showed the scale of the refining windfall. The company achieved a Geelong Refining Margin of US$21.40 a barrel in the September quarter, up 110% from US$10.20 a year earlier, while refining intake rose 5.2% to 9.1 million barrels.

The quarter also included one-off costs. The update showed stronger refining conditions alongside one-off hedging losses, higher crude premiums and fire-related limits. Excluding those hedges, the margin would have been higher still.

The shares fell 2.3% to A$2.97 following that operational update.

Record first half

The September quarter followed an exceptional first half. Viva's Energy and Infrastructure division reported EBITDA of A$353.7 million on a replacement-cost basis, materially higher than a year earlier, largely because of strong regional refining margins driven by disruptions to crude and product flows from the Middle East.

Geelong refining margins averaged US$21.10 a barrel during the half on crude intake of 19.7 million barrels. Earnings swung from a statutory deficit to solid profits, net debt fell and the interim dividend rose sharply.

The company signaled some moderation ahead. Viva said second-half earnings were expected to ease as some favorable term supply arrangements from the first half moderate, though earnings should still exceed the second half of 2025.

Fire constraints linger

The Geelong refinery is still recovering from a blaze in April. A fire broke out at the refinery on the evening of April 15, 2026.

The fire damaged the alkylation unit, which will stay offline through next year, while the residue catalytic cracking unit restarted in June and restored the refinery to close to full capacity. Viva continues to work with insurers on property damage and business interruption claims related to the fire.

Because margins are so high, losing some throughput costs less than it would in a normal year, but the outage remains a real constraint if strong conditions persist.

Coles exit and convenience strategy

Viva is also reshaping its retail supply arrangements. The company said completion of its Western Australia distribution facility will allow it to exit the Coles Product Supply Agreement by late November.

Convenience sales grew in the quarter even as convenience gross margin eased. Investors are monitoring the integration of the OTR and Reddy Express acquisitions alongside the refinery and commercial fuels businesses.

What comes next

Several near-term milestones could shape the stock. Analysts are watching for completion of the insurance claim, confirmation of the Coles exit, and whether a further refining-linked dividend is declared with the full-year result, as management has flagged it would consider an additional payout at year end.

The pace of the refinery's recovery will also determine how durable the margin rebound proves to be.

Wider forecasts suggest crude may stay elevated in the near term. Barclays said it maintains Brent forecasts of $100 a barrel in 2026 and $85 a barrel in 2027.