Energy stocks surge as oil prices hit 14-month high on Iran tensions
Brent crude jumps to $82 as Strait of Hormuz threat fuels supply concerns, boosting ConocoPhillips and ExxonMobil
Energy stocks rallied sharply on Monday as oil prices surged to their highest level in 14 months, driven by escalating geopolitical tensions between the United States and Iran that have raised fears of supply disruptions through the strategic Strait of Hormuz.
ConocoPhillips jumped 5.75% to $119.98, while ExxonMobil advanced 2.67% to $152.50, leading gains in the sector. The moves came as Brent crude futures climbed as much as 13% during early trading, reaching $82.37 per barrel—its highest level since January 2025. West Texas Intermediate crude also surged nearly 10%, briefly surpassing $75 per barrel to mark its strongest point in eight months.
The oil price spike follows intensified U.S. and Israeli military strikes on Iran and subsequent retaliatory attacks across the Gulf region, according to reports from the Wall Street Journal. The conflict has heightened concerns over potential disruptions to the Strait of Hormuz, a critical waterway through which approximately 20% of global oil trade passes.
A full closure of the Strait of Hormuz could eliminate 8 million to 10 million barrels per day of crude oil supply, analysts warned. The waterway's strategic importance makes it a focal point for market anxiety, with reports suggesting shipping operations have already been impacted by the escalating confrontation.
"The situation remains fluid, but the risk of prolonged supply disruption is clearly priced into the market," said analysts monitoring the situation. "Energy companies with significant production capacity are naturally positioned to benefit from higher commodity prices."
In response to the supply concerns, eight OPEC+ nations—including Saudi Arabia and Russia—agreed on Sunday to boost oil production by 206,000 barrels per day. The move aims to stabilize markets and prevent severe shortages, though analysts note that increased output may take time to reach the market and offset potential disruptions.
The energy sector's gains contrasted with broader market weakness, as rising oil prices fueled inflation concerns and dampened expectations for Federal Reserve rate cuts. Asian and European markets both started the week lower, while airlines and other transportation stocks slumped under the weight of higher fuel costs.
Analyst sentiment toward the major energy producers remains broadly positive. ConocoPhillips carries a consensus rating of "Moderate Buy" with an average 12-month price target of approximately $115.92, according to MarketBeat data. ExxonMobil is rated a "Buy" with a median price target of $141.00, implying slight downside from current levels but reflecting confidence in the company's long-term prospects.
Market participants are now watching for further developments in the U.S.-Iran confrontation, with particular focus on whether the Strait of Hormuz remains open to commercial shipping. Any escalation that threatens sustained supply disruption could push oil prices significantly higher, while diplomatic breakthroughs or de-escalation could quickly reverse the current gains.