The Strait of Hormuz shutdown, dwindling emergency reserves and fresh disruptions to Russian refining are reshaping the risk and opportunity profile across global energy markets. With Brent crude spiking and refined fuels such as diesel and petrol under pressure, some companies exposed to this news backdrop could benefit from tighter supply and stronger pricing power, while others face rising costs and operational constraints. This article walks through three stocks from the Energy Supply Shock Stocks With Geopolitical Exposure Opportunities screener. It highlights two that may be positioned on the right side of these disruptions and one that could be more at risk.

KLM Royal Dutch Airlines (KLMR)

Overview: KLM Royal Dutch Airlines is a full service carrier based in the Netherlands that provides passenger and cargo air transport worldwide, alongside aircraft maintenance, catering and handling services, and leisure travel through brands including transavia.com. The company also sells cargo capacity and technical services to third party airlines, and operates as a subsidiary of Air France KLM S.A.

Operations: KLM Royal Dutch Airlines generates most of its €12.8b business revenue from its Network segment (€10.6b), with additional contributions from Maintenance (€2.4b), Leisure (€1.4b) and Other (€293m). Geographic exposure is spread across Europe & North Africa (€5.8b), the Americas & Polynesia (€3.7b), Asia & New Caledonia (€1.9b), Africa & the Middle East (€1.2b) and the Caribbean & Indian Ocean (€576m).

Market Cap: €37.4b

For investors watching how the Strait of Hormuz shutdown and tighter fuel markets ripple through the aviation sector, KLM Royal Dutch Airlines stands out as a complex mix of opportunity and caution. Earnings growth over the past year has been very strong and profitability has improved, yet the stock trades on an effectively 0x P/E and is described as highly illiquid. This combination can both attract value focused investors and raise execution risk. The group’s global network and maintenance operations give it multiple revenue streams, but funding is heavily reliant on external borrowing and dividend payouts look poorly covered by free cash flow. High non cash earnings also mean you need to question how much of the recent profit strength is truly recurring.

Powerful reported earnings at KLM Royal Dutch Airlines with an effectively 0x P/E could be masking something important or hinting at mispriced upside; the DCF valuation analysis for KLM Royal Dutch Airlines might be where the real story starts

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

Overview: Saudi Aramco Base Oil Company - Luberef produces base oils used in lubricants and a range of by-products such as asphalt, marine heavy fuel oil, waxes and ultra-low sulfur diesel, supplying customers across Saudi Arabia, the UAE, India, South Africa, Egypt, Singapore, the US, South Korea, Cyprus and other markets.

Operations: Luberef generates its SAR8.1b business revenue from Oil & Gas, Refining & Marketing, with the Kingdom of Saudi Arabia contributing SAR5.2b and key export markets including the UAE (SAR1.6b), India (SAR538m) and South Africa (SAR361m).

Market Cap: SAR22.7b

Saudi Aramco Base Oil Company, Luberef, gives investors a focused way to gain exposure to tight global oil and refined product markets, as the Strait of Hormuz shutdown and attacks on Russian refineries tighten supply. Luberef benefits from cost-advantaged feedstock, fixed-rate freight contracts and the ability to reroute exports through the Red Sea. Forecast revenue and earnings growth, solid double-digit margins and high forecast ROE sit alongside board turnover, planned shutdowns at key facilities and heavier capital spending, which all add execution risk. The company’s pure play exposure to higher value base oils and specialty lubricants, together with its growing domestic role in Saudi mega projects, means the potential upside from this supply shock needs to be weighed carefully against operational and funding pressures that are still in play.

Accelerating demand for higher value base oils, fixed freight rates and Red Sea routing give Saudi Aramco Base Oil Company, Luberef, a story many investors may be underestimating. The analyst forecasts for Saudi Aramco Base Oil Company - Luberef could reveal why the real swing factor is not what most expect.

Delta (BSE:532848)

Overview: Delta Corp is an India based gaming and hospitality company that runs offshore and land based casinos in Goa and Sikkim, along with premium hotels such as The Deltin in Daman and Deltin Suites in Goa that bundle rooms, restaurants, bars and entertainment.

Operations: Delta Corp generates most of its ₹6.9b business revenue from Gaming (₹6.4b), with a smaller contribution from Hospitality (₹476m) and a minor inter segment adjustment.

Market Cap: ₹17.5b

Delta Corp might look like a straightforward way to gain exposure to India’s regulated casino and resort sector, but the picture is more complicated. Net profit margins have compressed from 43.5% to 12.4%, earnings have declined, and the stock is trading above at least one estimated future cash flow value, which raises questions about how much optimism is already reflected in the share price. Dividend payments are modest at 0.77% and not well supported by free cash flow, while share price swings have been much larger than the broader Indian market. In addition, relatively low ROE and full reliance on external funding suggest that the headline P/E and recent dividend announcement may only reflect part of the overall story.

Delta Corp’s shrinking margins and earnings slide suggest something in the story is stalling, yet the stock still prices in optimism. The 1 key reward and 3 important warning signs (1 is major!) could flag the pressure point investors are missing.

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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.