Energy stocks rally as Iran conflict threatens record oil prices
Goldman Sachs warns Brent could surge past 2008 high as strikes target key infrastructure
Energy shares surged on Friday as escalating conflict between Israel and Iran drove crude oil prices toward their highest levels since mid-2022, with Goldman Sachs warning that Brent could surge past its 2008 record high if supply disruptions persist.
Exxon Mobil advanced 1.6% to $160.71, while Chevron gained 0.9% to $203.32. Both stocks are trading above their 50-day and 200-day moving averages, reflecting strong upward momentum as investors rotate into defensive energy positions.
The rally comes as the three-week-old conflict in the Middle East has escalated beyond market expectations. An Israeli strike on Iran's South Pars natural gas field and subsequent Iranian retaliatory attacks on energy infrastructure in Kuwait and Qatar have highlighted supply risks that extend well beyond the Strait of Hormuz, which typically carries approximately one-fifth to one-third of global oil and liquefied natural gas supplies.
Brent crude has climbed to between $110 and $119 per barrel this month, marking the highest prices since mid-2022, according to market data. While still below the July 2008 record of $147.50 per barrel, Goldman Sachs analysts warned that the conflict could push prices above that threshold if the Strait of Hormuz remains significantly disrupted.
The scale of the price shock is already historic. Brent crude jumped 49% in March, marking its strongest monthly gain since November 1973, while New York Harbor ultra-low sulfur diesel futures soared 61% and gasoline futures rose 38%, both records for their respective contracts, reported by Benzinga.
Exxon Mobil reached a new 52-week high on Friday, with its Relative Strength Index strengthening toward overbought levels, indicating increased bullish pressure. Investors are betting that sustained elevated crude and refined-product prices will support stronger upstream earnings and cash generation for the world's largest oil and gas companies.
The International Energy Agency has ordered the largest release of government oil reserves in its history to help stabilize markets, while U.S. policymakers have considered lifting sanctions on Iranian oil and releasing strategic petroleum reserves to ease supply constraints, according to multiple reports.
Despite these intervention efforts, traders are increasingly anticipating a longer-lasting macro shift rather than a temporary shock. The Strait of Hormuz remains under military threat, intensifying fears of prolonged energy inflation that could reshape central bank policy trajectories worldwide.
Analysts note that while both Exxon and Chevron are currently trading above consensus target prices of $148.96 and $189.62 respectively, the unique supply shock environment could justify extended valuations if elevated prices persist through 2026. Chevron receives more buy ratings than its larger rival, with 16 bullish recommendations compared to Exxon's 13.