ASX 200 energy shares are among the fastest rising sectors during Thursday's market rebound after the US modified its tariffs.
US President Donald Trump has given trading partners a 90-day reprieve on the new US reciprocal tariffs announced on 2 April.
Trading partners will pay the new baseline tariff of 10% for the next 90 days before the higher tariffs, customised to each country, kick in.
This sparked a massive rebound in US share markets overnight, and the S&P/ASX 200 Index (ASX: XJO) is following suit today.
Currently, the ASX 200 is up 4.57%, while the S&P/ASX 200 Energy Index (ASX: XEJ) is streaking 5.04% higher.
Meanwhile, top broker Macquarie has issued a new note explaining why the US tariffs make it "now more cautious on refiners".
As a result, it has downgraded its ratings on ASX oil shares Viva Energy Group Ltd (ASX: VEA) and Ampol Ltd (ASX: ALD).
And it's not a small downgrade either.
US tariffs raise oil demand risks, says broker
Macquarie said one of the key risks to 2025 oil demand is playing out.
Larger-than-expected US tariffs have raised the risks to global growth and oil demand, the broker says.
Macquarie explains:
China's oil demand is already running on the softer side of expectations YTD.
Previously we positioned early for tighter refining S/D in 2026-27; however, new major oil demand risks materially alter the risk/reward.
Macquarie says it is now "anticipating weaker margins" for oil refining companies such as Viva Energy and Ampol.
The broker said the US tariffs meant "a weaker oil demand outlook would place downward pressure on refiner margins".
As a result, the broker has dropped its rating dramatically from outperform to neutral for both Viva Energy and Ampol shares.
Macquarie has also cut its 12-month share price targets on both ASX energy stocks.
Outlook for Viva Energy shares
The broker dropped its 12-month share price target on Viva Energy by 39% from $2.80 to $1.70 per share.
The Viva Energy share price is currently $1.53, up 4.23%.
Macquarie said:
We cut EPS ~28%/12% in 2025e/26e mainly on lower refining margins (now US$8.42/10.00 per bbl) and to a lesser extent a slower OTR store rollout across the heritage Express network.
Once Geelong clean fuels is completed, VEA does have a good degree of control over its growth capex (and the pace of rollout); however, we expect the equities market to be a lot more cautious around: (i) factoring in OTR execution success and (ii) VEA's balance sheet.
We note VEA could potentially be a winner if the Coalition is elected, based on its stance & policy on Organised Crime (which could at least partially unwind the illicit tobacco & vape trade through more effective policy).
Outlook for Ampol shares
The broker reduced its price target on Ampol shares by 15% from $28 to $23.70.
The Ampol share price is currently $22.04, up 6.22%.
Macquarie said:
We cut EPS 10/12% in 2025e/26e on lower refining margins (now US$8.44/US$10.11 per bbl), with still elevated capex of ~$600m in 2025 (eg, ULSF running over capex budget); we now have Adj Debt/EBITDA rising to 2.7x in 1H25 before falling back into 2.0-2.5x target range (2.4x) by end-CY25 (MRE 50% div payout 1H25, 60% 2H25, 70% in CY26 & beyond).
We forecast 1Q25 EBIT of $184m (significant improvement from 4Q24, driven by absence of refinery maintenance, despite QLD weather impacts).
