The potential Middle East peace deal has flipped the script for oil, with Brent crude moving from $87 to $79 a barrel and a possible 2025 supply glut on the horizon. For investors, that kind of shift can reward some stocks and squeeze others, depending on how directly they rely on crude prices or fuel costs. This article looks at three stocks exposed to the news, highlighting one that could benefit from cheaper energy and two that may face pressure if oil stays soft. The goal is to help you think through where lower oil could help or hurt in your portfolio.

Deutsche Post (XTRA:DHL)

Overview: Deutsche Post, also known as DHL Group, is a global mail and logistics company that moves parcels, freight and documents through its Express, Global Forwarding, Supply Chain, eCommerce and Post & Parcel Germany divisions across Europe, the Americas, Asia Pacific, the Middle East and Africa.

Operations: DHL Group generates most of its revenue from Express (€24.3b), Global Forwarding, Freight (€18.4b), Post & Parcel Germany (€17.9b) and Supply Chain (€17.9b), with smaller contributions from eCommerce (€6.7b) and Group Functions (€1.9b).

Market Cap: €58.6b

Deutsche Post stands out in an oil glut scenario because lower fuel costs can directly support margins across its global air and road networks at a time when it is already working on over €1b of cost savings through its Fit for Growth program. The company combines a broad logistics footprint, a 3.6% dividend yield and high quality earnings with catalysts such as a multi year USPS last mile contract worth more than €10b and major investments in automation and robotics. At the same time, high debt and exposure to trade regulation remain real risks. Investors looking at Deutsche Post today may want to consider how the balance of internal cost initiatives, lower fuel costs and leverage could influence future returns.

Deutsche Post’s margin story is quietly changing as cheaper fuel combines with more than €1b of cost savings and automation. See how that mix feeds into the DCF valuation analysis for Deutsche Post and where the key pressure point might sit.

Saudi Aramco Base Oil Company - Luberef (SASE:2223)

Overview: Saudi Aramco Base Oil Company - Luberef produces Group I and Group II base oils and a range of by products such as asphalt, marine heavy fuel oil, slack wax and sulfur, supplying lubricant producers and industrial customers across Saudi Arabia and multiple export markets. It sits within the wider Saudi Aramco ecosystem, with feedstock, logistics and customer links that connect it to major energy and petrochemical flows.

Operations: Luberef generates all of its SAR 8.1b revenue from oil and gas refining and marketing, with around SAR 5.2b coming from Saudi Arabia and the rest from export markets such as the UAE, India and South Africa.

Market Cap: SAR 201.4b

Saudi Aramco Base Oil Company, Luberef, sits in an awkward spot for an oil glut story, because cheaper crude from its parent can help feedstock costs while a prolonged slide in oil prices can weigh on product pricing, by product crack spreads and broader sentiment toward Aramco linked assets. The company has high quality earnings, double digit net margins and a dividend yield near 3.8%, but also relies heavily on external borrowings, faces ongoing plant upgrade and closure risks, and is committing sizable capex at a time when by product margins have already come under pressure. Investors weighing Luberef today have to consider how potential cost advantages and planned growth in higher value base oils compare with these operational and funding risks if oil prices remain weak.

Saudi Aramco Base Oil Company, Luberef, looks like a simple dividend story, but heavy borrowing, capex commitments and pressure on product margins suggest a tougher road ahead. Before oil weakness bites harder, review the 3 key rewards and 1 important warning sign

Valero Energy (VLO)

Overview: Valero Energy is a large refiner that produces and sells petroleum based and low carbon fuels, along with petrochemicals and ethanol products, across the US and multiple international markets under brands such as Valero, Beacon, Ultramar and Texaco.

Operations: Valero Energy generates the bulk of its US$131.7b business segment revenue from Refining at about US$118.2b, with smaller contributions from Renewable Diesel at US$5.1b and Ethanol at US$4.9b, partly offset by a US$3.4b loss in Corporate and Other.

Market Cap: US$73.4b

Valero Energy sits in a complex position in relation to an oil glut story, because a surge in global supply and weaker crude prices can squeeze refining spreads. At the same time, analysts already expect revenue and earnings to drift lower over the next few years. The stock screens as inexpensive against estimated fair value and recent earnings have been strong. However, a 3.6% net margin, reliance on higher risk external funding, insider selling and regulatory and legal questions around refineries and renewables all point to a thinner margin for error if refining margins soften. For investors, the key consideration is whether the current valuation adequately reflects those pressures in an environment where oil supply could be plentiful but profits less so.

Valero Energy’s thin 3.6% net margin and reliance on higher risk external funding could be masking a much tighter safety buffer than it appears. Before the next squeeze hits refiners, read the 3 key rewards and 2 important warning signs (1 is major!).

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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.