The tentative U.S.-Iran deal, with its 60 day ceasefire extension and plans to reopen the Strait of Hormuz, has quickly become a key theme for investors watching energy sector stocks. Reduced immediate geopolitical risk and the possibility of easing sanctions could reshape trade flows, shipping costs, and access to regional projects, creating both openings and new questions for portfolios. This article highlights 3 stocks from the Energy Sector Stocks With Exposure to Middle East Geopolitics screener that are closely tied to these developments. It is intended to help you assess whether their exposure to this news fits your risk and return expectations.

Chevron (CVX)

Overview: Chevron is a large integrated energy and chemicals company that explores for and produces oil and gas, transports and liquefies natural gas, refines crude into fuels and lubricants, and manufactures petrochemicals and additives across North America, South America, Europe, Africa, Asia, and Australia.

Operations: Chevron generates most of its revenue from its U.S. and international Downstream businesses (about US$72.7b and US$71.2b respectively), followed by U.S. and international Upstream operations (about US$47.3b and US$45.3b), with smaller contributions from other activities and intersegment eliminations.

Market Cap: US$370.2b

Chevron sits at the center of this tentative U.S. Iran deal story, with large global oil and gas operations that are closely tied to key shipping routes and LNG trade. Investors looking at Chevron stock today are weighing the potential benefits of steadier Middle East supply routes and new Mediterranean gas projects against clear risks, including weaker recent earnings, a 5.9% net margin, high capital needs, and exposure to long term decarbonization pressures. At the same time, the company’s integrated model, 3.95% dividend yield, long dividend track record, Mediterranean expansion, and ongoing buybacks mean any shift in geopolitical risk or oil pricing can have a significant impact on cash generation and returns, and that is where the story becomes more complex.

Chevron’s global scale, dividend yield and buybacks may be drawing attention away from the underlying story in its cash generation in a reopened Strait of Hormuz. Get the fuller picture with the 2 key rewards and 2 important warning signs (1 is major!)

TotalEnergies (ENXTPA:TTE)

Overview: TotalEnergies is a large French multi energy company that produces and sells oil, gas and LNG, biofuels, low carbon hydrogen, renewable power, and electricity across Europe, the U.S., Brazil, India, and other international markets.

Operations: TotalEnergies generates most of its revenue from Refining & Chemicals (about $117.2b) and Marketing & Services (about $62.6b), alongside Exploration & Production ($40.7b), Integrated Power ($21.8b), and Integrated LNG ($18.4b), with smaller corporate and intercompany items.

Market Cap: €162.4b

TotalEnergies combines traditional oil and gas scale with exposure to LNG and renewables, at a time when a tentative U.S. Iran deal points to a reopening Strait of Hormuz and lower immediate geopolitical risk. The company is adding regulated style cash flows through its approved 2.2 GW renewables joint venture with Masdar and large offshore wind projects, while still participating when global prices are supported by supply tensions. At the same time, unstable dividend history, sizeable insider selling in recent months, and exposure to higher risk regions such as Egypt and offshore Syria mean the situation includes several pressure points. For investors, the interest lies in how this balance between resilience, transition growth and geopolitical risk could develop from here.

TotalEnergies appears to have a risk profile that may differ from what its renewables expansion and LNG operations suggest. Before assuming the story is all upside, review the 4 key rewards and 2 important warning signs

BP (LSE:BP.)

Overview: BP is a large integrated energy company that produces and trades oil and gas, runs refining and fuel retail operations, and is building positions in solar, wind, hydrogen, bioenergy, EV charging, and aviation fuels worldwide.

Operations: BP generates most of its revenue from Customers & Products (about US$155.6b), with further contributions from Gas & Low Carbon Energy (about US$39.0b) and Oil Production & Operations (about US$24.0b), alongside smaller amounts from other activities and consolidation adjustments.

Market Cap: £79.9b

BP stands out in this Middle East focused screener because it combines a large global upstream and trading footprint, including around 400,000 barrels of oil equivalent per day from the region and flows historically shipped through the Strait of Hormuz, with an active program of portfolio reshaping and cost reduction. A more stable Persian Gulf reduces the risk of supply disruptions that its trading arm and Gulf of Mexico, Azerbaijan and other projects are exposed to. However, investors still have to weigh that against a high P/E ratio, a recent $4.9b non recurring loss, insider selling, dividend cover concerns, and ongoing boardroom turnover. The question is whether stronger cash generation in a calmer supply setting and divestments such as Browse LNG can justify that risk mix for you.

BP’s reshaped portfolio and higher P/E are sending mixed signals about what the market is really pricing in. Before assuming the story is fully reflected in the share price, scan the 4 key rewards and 3 important warning signs

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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.