Oil prices jumped 3% after renewed conflict between the U.S. and Iran over the Strait of Hormuz, a key route for about 20% of global crude shipments. When supply routes are at risk, some Energy, Oil & Gas Producers can face higher costs, while others may see stronger pricing power or shifting demand for their output. This article focuses on three stocks from our Energy, Oil & Gas Producers screener that appear closely exposed to these developments, and explains how this kind of tension around Hormuz may affect their risk profile, earnings mix and potential appeal for different types of investors.

Harbour Energy (LSE:HBR)

Overview: Harbour Energy is a London headquartered oil and gas producer with assets across the UK, Norway, Germany, Mexico, Argentina, North Africa and Southeast Asia, producing and marketing crude oil, natural gas and condensate while also developing carbon capture and storage projects. It also manages decommissioning, transportation, gas trading and risk management activities across this portfolio.

Operations: Harbour Energy reports multi country business revenue with about $4.3b from Norway, $3.9b from the UK, $6.9b from Corporate, $680m from Germany, $574m from Argentina, $315m from North Africa, $158m from Mexico, $146m from Southeast Asia, $13m from carbon capture and storage and a $6.8b adjustments and eliminations line.

Market Cap: £4.0b

Harbour Energy gives investors exposure to higher oil and gas prices triggered by events such as the Strait of Hormuz disruption, while its enlarged international footprint and mix of Brent linked oil and European gas can help smooth out shocks tied to any single region. The company screens as heavily undervalued on several measures and offers a high dividend yield, but it is still loss making, faces UK tax and regulatory pressure and relies on external borrowing, so the income stream needs close watching. Management highlights a lower cost base, hedging that aims to protect downside while keeping some upside and new revenue options such as carbon capture, which together create a more nuanced story than the share price alone suggests.

Harbour Energy’s mix of international assets, high yield, and loss making status hints at a story investors may be pricing too simply. It is therefore worth reading the 3 key rewards and 1 important warning sign

Murphy Oil (MUR)

Overview: Murphy Oil is a Houston based exploration and production company that finds and produces crude oil, natural gas and natural gas liquids across the United States, Canada and selected international offshore basins. Its portfolio focuses on oil weighted projects, particularly in the U.S. Gulf of Mexico and key onshore plays, which ties the company closely to global oil price movements.

Operations: Murphy Oil generates about US$2.2b in revenue from U.S. exploration and production and US$521.4m from Canadian exploration and production, with a small US$32.4m segment adjustment.

Market Cap: US$4.8b

Murphy Oil stands out as a pure play on geopolitically driven oil price swings, with no direct Middle East exposure but a portfolio that historically has been highly sensitive to price moves, including those sparked by the Strait of Hormuz tensions. The company combines oil weighted assets and recent exploration successes, such as the Bubale 1X light oil find offshore Côte d’Ivoire, with cost cuts and production efficiency efforts in core areas. At the same time, investors need to weigh a high P/E multiple, thin 3% margins, a dividend that is not well covered by earnings or free cash flow, and heavy reliance on external borrowing, all in a capital intensive offshore focused business that depends on future exploration outcomes.

Murphy Oil’s oil weighted portfolio and recent Bubale 1X light oil discovery may be obscuring a more complex risk-return profile than the headline P/E suggests, so review the 2 key rewards and 2 important warning signs (1 is major!)

Whitecap Resources (TSX:WCP)

Overview: Whitecap Resources is a Calgary based oil and gas producer that acquires and develops petroleum and natural gas assets across Western Canada, with core programs in Northern and Central Alberta, British Columbia, and Western and Eastern Saskatchewan.

Operations: Whitecap Resources generates about CA$6.2b in revenue from oil and gas exploration and production, all from assets in Canada.

Market Cap: CA$18.5b

Whitecap Resources gives you pure exposure to Canadian light oil and condensate at a moment when higher crude prices linked to Middle East tensions and the Strait of Hormuz are feeding into premiums over WTI. The company combines a large, liquids weighted production base with cost efficiency gains, active hedging on a portion of output and ongoing dividends and buybacks, while also working on CO₂ sequestration projects that relate to longer term policy trends. At the same time, earnings depend heavily on volatile commodity prices, margins have moved lower from prior levels and all funding comes from external sources, which adds balance sheet risk. The key consideration for investors is how these strengths and pressure points balance as higher prices affect Whitecap’s cash flows and capital plans.

Whitecap Resources’ expanding CO₂ work and oil weighted cash flows could be masking a much bigger story about resilience and payout capacity, so it is worth reading the 4 key rewards and 2 important warning signs

The three Energy, Oil & Gas Producers stocks covered here are just a starting point, with the full Energy – Oil & Gas Producers screener surfacing 30 more companies that pair sizable operations with financial profiles that may support equally compelling investment stories. Use Simply Wall St to identify and analyze the specific catalysts, risk factors and earnings drivers that matter to you so you can focus on the highest conviction opportunities in this part of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.