As Oil Prices Soar, Not All Energy Stocks Are Winners

Key Takeaways

• The energy sector has outperformed the broader stock market since the start of the Iran war thanks to the surge in oil prices, but not all companies have seen share price gains.
• Liquefied natural gas stocks have been the biggest winners in response to the significant disruption to LNG production in the Middle East.
• Some oilfield service and pipeline company stocks have fallen, possibly due to geographic disruptions, according to Morningstar analysts.

As oil prices continue to rise amid the Iran war, many energy stocks have been big winners. However, not all names within the sector are benefiting.

After moderate gains in 2025, the energy sector as measured by the Morningstar US Energy Sector Capped Index has risen nearly 30% so far this year. That is more than three times the next-best performer, the utilities sector, which is up about 9% and well ahead of the overall market as measured by the Morningstar US Market Index, which has lost about 3%. Since the onset of the war, the energy sector is up roughly 4%, while the stock market is down about 5%.

The catalyst for the rally in energy stocks is the jump in oil prices caused by the Iran war. West Texas Intermediate crude closed this past week at nearly $99 per barrel, up roughly 47% since before the conflict started. With the ongoing restricted oil access in the Middle East, economists warn that prices will continue to climb unless the war ends soon.

Even prior to the war, a number of oil companies had already been riding the energy sector’s double-digit gains over the prior year. Since the start of the conflict, those gains have expanded. For example, Oil and gas exploration and production company Devon Energy DVN had been up 23% for 12 months through the end of February and has since gained an additional 11%. It’s a similar story for EOG Resources EOG, which had rose 19% in the year prior to the start of the war and has also tacked on an additional 11% gain.

Despite energy sector volatility, the overall US stock market has proved relatively resilient. While economists warn a long-term conflict and elevated oil prices could cause widespread economic issues, our analysts remain optimistic that the conflict and market strife will be short-lived. “We think trade disruptions remain a short-term issue, amplifying near-term supply pain,” wrote Morningstar analyst Adam Baker in a recent note.

LNG Stocks Soar

The biggest winners have generally been liquefied natural gas stocks following the Strait of Hormuz shutdown and news that QatarEnergy LNG, the world’s largest liquefied natural gas company, had shut down production. That includes Venture Global LNG VG and Cheniere Energy LNG, which have soared since the start of the Iran war. Venture Global stock is up 53.5% since the start of the war and 118.1% so far this year. Cheniere shares have jumped 12.9% since the war began and are up 37.3% in 2026. Baker says gas companies are benefiting from strong demand in Europe and Asia, both of which heavily rely on the Middle East for energy access.

A Mixed Picture for Oil and Gas Stocks

While oil stocks posted solid gains in early 2026, some have seen a reversal since the war broke out. Oilfield service companies have seen sharp losses, including an 18% drop in shares of Weatherford International WFRD and a 12% drop in Baker Hughes BKR. Since the war began, oilfield service company SLB SLB has also declined 11.7%. Production and exploration firm NOV NOV has dropped 9.5%. Prior to the conflict, SLB shares were up 34.5% for 2026, while NOV’s stock had been up 29.6%.

Morningstar director Josh Aguilar expects US shale companies—those involved in oil and gas exploration and production—to continue making strides. Those include Devon, EOG, and Occidental Petroleum OXY, which have all seen double-digit returns since the start of the war. Production and exploration companies Diamondback Energy FANG and ConocoPhillips COP and oilfield service firm Halliburton HAL have also seen their stocks move higher. “We expect fundamental winners to be US shale, Canadian crude, and covered midstream and refiners, while services firms face headwinds,” wrote Aguilar in a recent note.

Baker attributes these varied results to the different services that oil companies provide. Energy Transfer, for example, operates pipelines in North America, which he says makes the firm unlikely to benefit from price volatility in the sector. Other companies are seeing rising share prices because non-oil segments are performing well, like Occidental’s chemical business, according to Baker.

The varied market response among energy stocks also reflects the belief among investors that the conflict is not likely to have a long-run impact on oil supply and demand. “The market is pricing in the disruption as short-term, hence the more muted response since the conflict began,” he says.