Oil Majors Rally as Middle East Crisis Reprices Market

Chevron CEO warns supply shock underpriced; XOM hits all-time high amid geopolitical tensions

Energy Market Overview

Oil prices surged over 50% in the past month with WTI crude trading in the $90 to $100 range before tumbling more than 10% on Monday after President Trump announced "very good and productive" talks with Iran and postponed threatened strikes on Iranian energy infrastructure. The closure of the Strait of Hormuz has severely disrupted global energy supplies, though some energy stocks have rallied only modestly as markets anticipate a quick resolution.

Oil & Gas Majors

$XOM hit an all-time high as investors load up on the stock amid rising oil prices, with the company offering a 3.48% dividend yield backed by over a decade of growth and a strong balance sheet. ExxonMobil was awarded FEED contracts by SBM Offshore for the Longtail FPSO development project in Guyana, advancing its offshore production growth strategy. $CVX has posted strong recent performance with a 30-day share price return of 11.6% and 90-day gain of 36.3%, though CEO Mike Wirth warned that oil futures markets have not fully accounted for the supply disruption from the Strait of Hormuz closure.

Utilities & Power Demand

$NEE CEO John Ketchum discussed rising energy demand and AI-driven power needs at CERAWeek in Houston, highlighting investment and M&A opportunities. NextEra's higher ROE, stronger EPS growth outlook, and larger $94 billion capex plan position it ahead of American Electric Power in the utility sector.

Geopolitical Supply Risks

The Middle East conflict, including Iranian missile strikes and the Strait of Hormuz closure, has pushed energy security back into focus and elevated crude prices near $100 per barrel. Chevron CEO Mike Wirth stated that energy markets should be more worried, arguing the oil market is underpricing the impact of the Hormuz closure. Analysts expect elevated oil prices to persist through 2026 as Middle East tensions continue, with $COP, $OXY, and other producers positioned to benefit from the supply shock.

Looking Ahead

Investors are monitoring ongoing US-Iran negotiations for signs of resolution to the Strait of Hormuz crisis, with any diplomatic breakthrough likely to impact near-term oil price trajectories. North American oil producers are positioned to capitalize on sustained elevated crude prices, with analysts highlighting opportunities in $COP, $EOG, and $XOM. Oilfield services provider $SLB saw gains as investors anticipate long-term profits once the conflict subsides, while $HAL closed up 2.68% in Monday's session.

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