This year’s oil price rally has produced one clear winner: South Africa’s Sasol is the top-performing emerging-market stock outside Asia and many analysts are betting its bull run has further to go.

Sasol has handed investors dollar a return of almost 120% this year, building on last year’s 45% gain and putting it on track for its best annual performance since at least 1991. That’s not far behind Asia’s giant chip and internet companies in MSCI’s main emerging-equity index.

The performance is all the more remarkable, given it comes after years of ballooning debt and project delays that saw shares lose 85% of their value between June 2022 and April 2025.

The latest share rally is of course down to surging energy and chemicals prices amid the Iran conflict. But Sasol has another advantage — it derives the majority of its oil output from coal, using special coal-to-liquids technology, which reduces its reliance on Middle East crude. Synthetic fuel production at its Secunda facility is running at five-year highs, the refiner said in results reported Sept. 1.

“It’s a great turnaround story,” said Adrian Hammond, executive director at SBG Securities in Johannesburg. “Sasol is not like a typical refinery, their core operation takes coal that they mine and turns it into fuel and chemicals.”

While a conventional refiner would currently buy crude at around $100 a barrel, Sasol gets feedstock at a fraction of that cost, while selling the finished product at market prices, Hammond says. He projects the share price to almost double from current levels over the coming year to 450 rand apiece, because the stock has been overlooked by many local investors so far.

That implies “a rapid re-rating when sentiment does eventually shift,” he said.

Sasol’s outperformance coincides with greater investor optimism toward South Africa, due to economic reforms and signs of cooling inflation. But the company’s own finances have improved too. Net debt is down 11% during the financial year ended June 30. Further reductions may enable it to pay dividends for the first time in more than two years, management has said.

The shares have gained more than 43% since the start of the second quarter, compared with a decline of 1.9% in the local benchmark gauge.

Earlier this year, some analysts advised clients to take profit on the shares, saying they looked expensive relative to history. While the rally has extended since then, Sriharsha Pappu, global head of energy and materials research at HSBC, acknowledged that an oil-price reversal could stall the momentum. Pappu has a buy rating on the stock, with a 260 rand target.

Even so, for now, the macro-economic tailwind remains in Sasol’s favour, said Aeysha Samsodien, a portfolio manager at M&G Investments. If oil prices stay elevated, Sasol can continue to cut debt and strengthen its balance sheet, she said.

The stock has four buys, five holds and two sell-equivalent ratings from analysts tracked by Bloomberg, with an average price target of 238.01 rand. The shares traded around 231.60 rand on Monday.