- Escalating tensions in the Gulf have pushed geopolitical risk back to the center of market pricing.
- With the Strait of Hormuz in focus, oil and energy equities are reacting swiftly.
- Select energy names could benefit further if supply risks persist.
- Decisive times for the world call for decisive thinking in the market. To help you navigate a shifting environment, we’ve lowered the price of our subscription for a limited time.
The military escalation between Israel, the United States, and Iran has abruptly pushed geopolitical risk back to the forefront of financial markets. Since the coordinated strikes by Washington and Tel Aviv against Iranian targets, followed by Tehran’s retaliation across the Gulf, investors have been closely watching a strategic chokepoint: the Strait of Hormuz.
This maritime passage alone accounts for around 20% of global oil trade, making it one of the most critical arteries in the global energy system.
The market’s initial reaction was swift. surged, with a barrel of WTI nearing $75 on Monday—its highest level since June 2025. At the same time, energy stocks outperformed, supported by the prospect of higher margins should tensions continue to disrupt global supply.
This pattern is familiar to seasoned investors: during periods of geopolitical shock in the Middle East, the energy sector often serves as a natural hedge against macroeconomic risk. The rationale is straightforward. When tensions threaten hydrocarbon production or transportation, crude prices tend to rise—automatically boosting cash generation for major producers.
Of course, not all energy stocks are equal. Some companies offer direct exposure to rising oil prices, while others provide greater visibility on dividends or more diversified business models (LNG, refining, integrated energy).
In this volatile yet potentially favorable environment for the sector, we sought to identify energy stocks that could benefit if tensions between Israel, the United States, and Iran persist.
To do so, we used the Investing.com screener and applied the following criteria:
- Market capitalization above $1 billion
- Energy sector
- Up more than 5% on Monday
- Upside potential above 20% according to InvestingPro Fair Value
This screen returned six opportunities:
- Are you subscribed to InvestingPro with a Pro+ plan? Click here to access this saved research on the screener
- Are you subscribed to a Pro plan and want to upgrade to Pro+? Click here to upgrade!
In detail, InvestingPro’s Fair Value—an aggregate of established valuation models—indicates that these U.S. energy stocks are undervalued by 20.1% to 37.1%.
Finally, there are many other ways to identify attractive stocks right now, including preconfigured screens that allow investors to filter companies meeting specific criteria with a single click.
Available themes include “value,” “growth,” “quality,” “defensive,” and others, enabling investors with different profiles to find stocks aligned with their strategy.
Please note: Some searches are reserved for InvestingPro subscribers with a PRO+ plan.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.
