Oil price swings and fresh conflict headlines in the Gulf are again front and center for markets. When missiles fly and supply routes face new questions, some stocks with close ties to energy pricing and global trade can see sharp moves, both positive and negative. This article focuses on three stocks from our Oil Volatility and Geopolitical Risk Stock Opportunities screener that are directly exposed to the latest U.S. and Iran flare up. You will see how each one might react to higher oil volatility and shifting risk appetite so you can decide whether they fit your own portfolio approach.

Occidental Petroleum (OXY)

Overview: Occidental Petroleum is a large U.S. based oil and gas producer that explores for, produces, transports and markets crude oil, natural gas and natural gas liquids, with additional activities in midstream logistics and carbon management. It operates across the United States and select international regions, including the Middle East.

Operations: Occidental generates about US$20.2b from Oil and Gas and US$1.5b from Midstream and Marketing, with most revenue tied to U.S. operations of roughly US$17.7b and about US$4.2b from international markets.

Market Cap: US$53.6b

Occidental Petroleum provides direct exposure to oil price swings at a time when renewed U.S. strikes on Iran have pushed geopolitical risk and crude volatility back to the forefront. The company has been working on efficiency and deleveraging, while also building a carbon capture business that could add new revenue streams alongside its core oil and gas production. At the same time, the stock carries a high P/E and depends heavily on oil prices, so earnings can be sensitive if the conflict eases or demand weakens. Recent analyst commentary has focused on balance sheet repair, cost cuts and cash flow, which makes the risk or reward trade off around today’s valuation especially important to understand.

Occidental Petroleum’s high P/E, balance sheet repair and carbon capture plans raise a clear question: Is today’s price still justified by the full story on cash flow, leverage and future oil sensitivity in the Occidental Petroleum financial health report?

United States Oil Fund (USO)

Overview: United States Oil Fund (USO) is an exchange traded fund that aims to track the daily moves of West Texas Intermediate crude oil prices by holding oil related futures and other derivatives. This gives you a way to express a view on oil without trading futures directly.

Operations: USO generates about US$887.8m in revenue from its closed end fund activities, all of which is tied to the United States market.

Market Cap: US$1.47b

With U.S. strikes on Iran raising the risk of supply disruption through the Strait of Hormuz, United States Oil Fund provides relatively direct exposure to short term swings in WTI crude prices rather than to the balance sheets of individual oil producers. The fund currently trades on a P/E of 1.8x and reports a 33.2% ROE and strong net margins. However, heavy use of derivatives and a high share of non cash earnings make quality and sustainability key questions. Combined with high reliance on external borrowing, this creates a volatile but focused way to position around geopolitics that may warrant closer examination before you commit capital.

United States Oil Fund’s low 1.8x P/E and high 33.2% ROE suggest that futures pricing and headline risk might be masking the real story. Get the full picture in the analysis report for United States Oil Fund

ExxonMobil Holdings (XOM)

Overview: ExxonMobil Holdings is a large integrated energy company that explores for and produces oil and gas, refines crude into fuels, and manufactures chemicals and specialty products sold under the Exxon, Esso and Mobil brands around the world. It also runs a portfolio of lower emission projects, including carbon capture, hydrogen, lithium and materials for data centers.

Operations: ExxonMobil Holdings generates most of its revenue from Energy Products at about US$295.8b, followed by Upstream at roughly US$101.8b, Chemical Products at about US$32.6b and Specialty Products at around US$20.4b, with activity spread across the United States, Canada and other international markets.

Market Cap: US$634.3b

ExxonMobil Holdings sits at the center of today’s Middle East conflict story because it combines a large upstream and refining footprint with projects in the region that are directly affected by shipping disruptions through the Strait of Hormuz. Recent management commentary highlights how its scale, integrated model and long history in the Middle East may help it keep operations running and support supply when routes are constrained. This can be particularly relevant in periods of heightened oil price volatility. At the same time, earnings growth has been modest, margins have come under pressure and returns rely on heavy external borrowing. Investors may wish to consider factors such as valuation, cash flows and the impact of higher prices on both potential upside and risk when deciding how ExxonMobil fits into their own energy exposure.

ExxonMobil Holdings appears designed for periods of oil volatility; however, its modest earnings growth and pressured margins suggest the real story lies in how the business model performs when routes tighten. Get the missing context in the 2 key rewards and 1 important warning sign

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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.