Oil prices have surged after renewed U.S. military action against Iran and rising tensions around the Strait of Hormuz, with Brent above $94 a barrel and WTI over $87. When crude jumps, it can reshuffle winners and losers across the stock market, from producers and traders to firms tied to oil-linked financial instruments. This article looks at how the latest geopolitical shock is feeding into that reshuffle and what it might mean for investors weighing exposure to oil price moves. Ahead, you will see 3 stocks from our Oil Price Shock Opportunities From Geopolitical Supply Risks screener that appear positively exposed to this news.

Occidental Petroleum (OXY)

Overview: Occidental Petroleum is a large Houston based energy company that explores for and produces oil, natural gas liquids and natural gas, and also runs a midstream and marketing business that gathers, transports and sells those commodities in the U.S. and overseas.

Operations: Occidental generates most of its roughly US$21.2b in revenue from its Oil and Gas segment, with about US$1.5b from Midstream and Marketing, and the bulk of sales coming from the United States alongside several international operations.

Market Cap: US$54.9b

Occidental Petroleum can provide direct exposure to higher crude prices at a time when U.S. Iran tensions and concerns around the Strait of Hormuz have pushed Brent above US$94. Management has previously highlighted that stronger WTI can translate into much higher cash tax payments, which indicates how sensitive its earnings are to the oil price. The company is also investing heavily in carbon capture and enhanced oil recovery, aiming to use its U.S. focused asset base and CO2 expertise to extend reservoir life and tap policy incentives. Set against that, earnings have recently declined sharply, profit margins are thinner, the P/E is high and the balance sheet still carries risk, so the key consideration is whether the potential upside from this oil price shock adequately compensates for those pressures.

Occidental Petroleum’s earnings sensitivity to WTI and its push into carbon capture could be masking a very different risk reward profile than the headline P/E suggests. It is therefore worth reading the full 2 key rewards and 2 important warning signs

United States Oil Fund (USO)

Overview: United States Oil Fund (USO) is an exchange traded fund that uses oil futures and related derivatives to give you direct exposure to daily moves in light, sweet crude oil prices, as well as other petroleum fuels traded in U.S. markets.

Operations: USO generates about US$887.8m in revenue from its Financial Services, Closed End Funds segment, all from the United States.

Market Cap: US$1.5b

United States Oil Fund stands out for investors who want a pure play on crude prices at a time when U.S. Iran tensions and concerns over the Strait of Hormuz are keeping supply risks front and center, with Brent above US$94 and WTI over US$87. USO has tracked these swings closely. Its low P/E and very high recent profit margins highlight how sensitive its earnings are to oil moves and futures pricing. At the same time, high non cash earnings, reliance on external funding and a long tenured board with few new directors underline that this is not a low risk holding. Understanding how those benefits and vulnerabilities balance out is crucial before using USO as an oil shock vehicle.

United States Oil Fund’s sharp earnings swings and low P/E hint that futures pricing might be masking the real story behind those profits. For more details, it is worth reading the full analysis report for United States Oil Fund

ExxonMobil Holdings (XOM)

Overview: ExxonMobil Holdings is a large integrated energy company that explores for and produces crude oil and natural gas, refines those hydrocarbons into fuels and lubricants, and manufactures a wide range of chemicals and specialty products sold globally under the Exxon, Esso and Mobil brands.

Operations: ExxonMobil Holdings generates most of its revenue from Energy Products at about US$295.8b, followed by Upstream at about US$101.8b, Chemical Products at about US$32.6b and Specialty Products at about US$20.4b, with a large portion of sales in the United States and the rest across Canada and other international markets.

Market Cap: US$614.9b

ExxonMobil Holdings provides exposure to movements in oil prices through a global production and refining footprint. Its low cost Guyana and Permian assets, LNG projects and lower emission businesses aim to support earnings quality over time. The stock is trading below some fair value estimates and analyst targets, yet faces real trade offs such as a P/E above the industry average, dividend coverage questions from free cash flow, and earnings that recently declined despite a solid long term record. With Middle East tensions affecting crude prices and management highlighting how supply disruptions can keep margins tight, investors may weigh that potential against funding risk, litigation and energy transition pressures that still need to be priced in.

ExxonMobil Holdings may be reflecting only part of its full story in the current pricing, with oil exposure, LNG, and lower emission projects all playing a role. Before you decide how that balance stacks up, read 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.