To The Moon

Escalating hostilities in the Middle East are boosting crude oil stocks once again. This comes after US forces continued its airstrikes against Iran on 17 Jul 2026 for a 6th day. No sooner had the June 2026 US’s consumer price index (CPI) report showed a sign of a breather (3.5% vs May’s 4.2%) on US inflation when it was released on Tue, 14 Jul 2026, than the latest military assault once again, raised inflation expectations. What is worse is that Trump is mulling sending ground troops to weaken the Iran Revolutionary Guards (IRG) forces, and Iran issuing an equally forceful counterstrike warning. (see below) If Trump carries out what is currently seen as veiled pressure tactics to get Iran back to the drawing table, all hell will break lose in the stock market and oil prices will most definitely skyrocket. The man has painted himself into a corner and does not know how to extricate himself out of the mess he created, short of brute force. The geopolitical factor has just dialed up a notch, willingly or unwillingly. If unrest spreads to the rest of the Gulf region, where oil fields & refineries are going to be impacted, don’t have to talk about the Straits of Hormuz anymore. As this post is not a geopolitical piece, let’s get back to the oil topic, proper. Crude Oil Futures: March – July 2026 An analysis of the Brent and WTI crude oil markets highlight severe volatility driven by geopolitical unrest since March 2026. (see below) Brent and WTI crude both surged in early March 2026 when Trump escalated the war against Iran. Traders reacted quickly and priced in the risk of supply disruption through the Strait of Hormuz. Brent led the move, trading at a premium to WTI as the market assigned a larger geopolitical risk charge to seaborne Middle East barrels. As tensions eased subsequently, both contracts gave back part of the gains, but the spread stayed positive, reflecting Brent’s greater sensitivity to international supply shocks. As of 16 Jul 2026 In Details. At the onset of the US-Iran conflict in early March, both benchmarks experienced a drastic upward shock, surging well past $100 per barrel. (see above) The immediate threat of widespread supply disruptions through the Strait of Hormuz drove the initial market panic, causing the sharp spike. On 10 Mar 2026, as reported by Reuters oil prices dropped more than 6% after Trump signaled the Middle East conflict could end soon, with Brent at $91.81 and WTI at $88.51. When the cry-wolf Middle East truce did not happen, crude prices rose again. From April 2026, Brent and WTI were still trading with a heavy war premium after the Iran conflict had pushed crude sharply higher. As the days rolled into weeks into months, US market began to alternate between escalation fears and hopes of de-escalation, with prices stopped climbing in a straight line. Instead of settling into a volatile, elevated range. Brent stayed stronger than WTI throughout, reflecting its greater exposure to global shipping and Middle East supply risk. The highs and lows of April 2026, ranged between $101.16 Brent / $100.12 WTI (01 Apr 2026) and $114.01 Brent / $105.07 WTI (30 Apr 2026). By May and into mid-June, the tone became more two-sided: Each new peace headline trimmed part of the premium, but every renewed sign of tension quickly brought buyers back into the market. That meant the crude market stayed supported, but the move was no longer a clean one-way rally; it became a tug-of-war between geopolitical risk & diplomacy. Just before the peace truce was signed on 17 Jun 2026, oil was still firm, but it was trading more on headline sensitivity than on pure momentum. The highs and lows of May - June 2026, ranged between $108.17 Brent / $101.94 WTI (01 May 2026) and $83.81 Brent / $80.98 WTI (14 Jun 2026). The ‘fall’ is drastic. Brent remained the cleaner gauge of the conflict premium, while WTI followed in the same direction with slightly less intensity. Prices gradually cooled in the intervening weeks following the MOU signed, with a 60-day ceasefire period to negotiate permanent terms. Unfortunately, the ‘peace’ was not easy to maintain with both sides continued to trade sporadic fires on and off, as both sides tried to gain control of the Straits, via tariffs imposition. The truce officially ended in early July 2026 after retaliatory strikes escalated, with Trump declaring the ceasefire over and restarted military strikes and reinstated naval blockades against Iranian ports. The highs and lows of mid June - early July 2026, ranged between $82.24 Brent / $79.44 WTI (15 Jun 2026) and $76.01 Brent / $71.41 WTI (10 Jul 2026). The ‘fall’ is drastic. This renewed aggression has prompted fears of critical energy chokepoint closures to re-enter the market, driving crude oil futures higher once again. XOM and CVX, now ? With crude futures back underpinned by geopolitical risk, $Exxon Mobil(XOM)$ and $Chevron(CVX)$ look attractive in July 2026 (again) because they can turn a sustained oil rally into stronger cash flow and shareholder returns, while still trading with less day-to-day volatility than the futures themselves. Buying stocks like XOM and CVX in July makes sense for 2 simple reasons: A Safety Net against Volatility: Trading raw oil futures is highly risky because prices can wildy swing overnight. Buying oil stocks instead lets an investor profit from rising oil prices with less overall risk. Solid Financials: Even if oil prices temporarily cool down, these massive companies still pay regular, reliable dividends to their shareholders. Oil Stocks Profitability. Even without going into XOM and CVX quarterly earnings in details, a historical comparison between Brent & WTI crude price movement versus XOM & CVX quarterly EPS charts (graphically) shows why oil stocks is the way to go for now. (see below charts) Brent & WTI Crude Futures historical price movement Above is a historical track of Brent & WTI crude oil futures price movement from January 2025 to latest July 2026. The black markings denote quarterly time period / frame. XOM & CVX quarterly EPS chart. Similarly, above depicts both XOM & CVS quarterly EPS between Q2 2025 to Q1 2026. Historical Correlation: Oil Futures & Oil Stocks. Analyzing the quarters leading up to 2026 demonstrates how closely EPS mirrors the rise and fall of crude benchmarks: Q1 2025 to Q2 2025 (Down Trend): During Q1 2025, Brent and WTI prices began a steady downward slide, bottoming out around July 2025 near $60–$65 per barrel. Because of pricing pressure, CVX’s earnings fell into Q2 2025, and XOM's earnings also softened. Q2 2025 to Q3 2025 (Up Trend): Crude prices staged a recovery during the summer of 2025, driving benchmarks back toward the $75 range. Correspondingly, both XOM and CVX experienced a noticeable bump in EPS, with both companies comfortably beating analyst expectations. Q3 2025 to Q4 2025 (Down Trend): Oil prices entered a prolonged period of weakness during H2 2025, hitting a multi-year low of roughly $55–$60 per barrel by January 2026. The slide dragged corporate profits down with it, causing both XOM and CVX to report lower quarterly EPS. In each cycle, as the crude lines on the chart go, corporate earnings follow. Equally interesting note is, despite the ‘fall’ in oil futures and correspondingly quarterly earnings, both XOM & CVX quarterly EPS still beat Wall Street analysts’ estimates - that is important. Q1 2026 Conflict Spike & Earnings Beat The absolute proof of this correlation occurred in Q1 2026, directly driven by geopolitical shock. On February 28, 2026, the US-Iran conflict erupted. This immediate geopolitical threat caused an abrupt, near-vertical spike in the crude futures chart, propelling Brent and WTI from their sub-$60 lows straight past $100 per barrel in March 2026. The dramatic surge at the tail end of Q1 2026 had both companies reported much stronger financial results than Wall Street had modeled: XOM Q1 2026 EPS: Wall Street projected an EPS of $1.01. XOM delivered an actual adjusted EPS of $1.16, marking a substantial +$0.15 or +14.85% beat. CVX Q1 2026 EPS: Analysts expected an EPS of $0.97. CVX blew past estimates to report an adjusted EPS of $1.41, representing a massive +$0.44 or +45.36% beat. The sudden explosion in oil prices instantly lifted profit margins on the oil these supermajors pumped and sold during March, translating geopolitical instability directly into better-than-expected Q1 earnings. Heading into Q2 2026. With the Middle East conflict heating up again in July 2026, Brent has climbed back to $84.56 and WTI to $79.50. Since history have proven that corporate earnings follow these prices, the current commodity spike will likely push upcoming quarterly earnings for both XOM & CVX higher. Both XOM and CVX are slated to report their respective Q2 2026 earnings on Fri,31 Jul 2026. Wall Street analysts have significantly revised their Q2 expectations upward to capture the full operational impact of the US-Iran geopolitical conflict. With crude prices remained highly elevated throughout Q2 2026 (see above), with Brent averaging $96.68 per barrel due to the ongoing tensions, consensus forecasts point to an exceptionally strong quarter for the energy sector. Below are the official consensus estimates by Wall Street analysts: Q2 Catalyst: Estimate Revisions The impact of the US-Iran conflict on corporate bottom lines is reflected in how sharply analysts revised their numbers over the quarter: Sector-wide Revisions: According to FactSet data, the estimated dollar-level earnings for the S&P 500 Energy sector surged by +50.4% over the course of the quarter as analysts scrambled to adjust for higher commodity prices. This shifts the broader sector's YoY earnings growth forecast to 122.9%, the highest across all eleven market sectors. ExxonMobil (XOM): Analysts originally modeled much lower figures earlier in the year, but tracking platforms confirm that consensus EPS estimates for XOM climbed to $3.76 ahead of the 31 Jul 2026 reporting date. This follows an earlier upstream guidance increase of $3.5 billion to $3.9 billion reported after military actions and tanker attacks disrupted global logistics via the Strait of Hormuz. Chevron (CVX): Following its Q1 beat of $1.41 (vs the $0.96 estimate), Wall Street analysts set a highly bullish consensus target of $5.27 EPS for Q2 2026. This aggressive forecast reflects expectations of maximized output and strong profit margins from its global upstream portfolio during the peak weeks of the oil shock. If Brent and WTI continue their current July 2026 rebound, both supermajors are well-positioned to meet or exceed these elevated expectations when they officially report on the last day of July 2026. Why It Is Not Too Late. Casting Q2 earnings outcome aside as Wall Street consensus expectations have already been significantly revised upward or baked in, decision to buy into XOM or CVX, depends on investor’s (a) investment horizon and (b) risk tolerance - fundamental deciding factors. Continued Geopolitical Premium: Recent resumption of US military actions and port blockades in Iran during July has reinstated a structural risk premium in Brent and WTI futures. As long as the Strait of Hormuz remains a focal point of conflict, crude prices are fundamentally supported, directly benefiting the upstream margins of these supermajors. Strong Fundamental Backing: For long-term investors, both XOM & CVX feature (a) solid balance sheets, (b) high institutional ownership, and (c) reliable shareholder returns. Chevron offers a robust +3.9% dividend yield, while ExxonMobil provides a +2.8% yield, offering cash flow insulation even if commodity prices experience temporary corrections. In short, it is not too late, but the 2 stocks are no longer a low-risk entry on pure momentum. Invest with Eyes Wide Opened. In the event that an investor is keen to enter, beware of the followings ok: Technical Resistance: Both XOM & CVX, have already staged significant rallies off their June lows. (see below) CVX is currently testing strong technical resistance near the $182 price level. According to short-term oscillators, the swift 3-day advance in July has pushed CVX close to overbought territory on the Williams %R, indicating that a minor near-term price pullback or consolidation could occur before the stock breaks higher. Priced-In Revisions: According to FactSet, the +50.4% upward revision in the S&P 500 Energy sector's projected earnings means a substantial portion of the Q2 oil shock is already reflected in the current stock prices. Any sign of de-escalation in the US-Iran conflict would quickly deflate the geopolitical premium, leading to a swift downside adjustment in energy equities. Other Possible Considerations. Apart from XOM and CVX, here are 5 other equally investible oil stocks for considerations with same expended upsides & cautions thrown-in : Saudi Aramco : approx. $1.68 trillion - $1.80 trillion $SHELL PLC(SHEL.UK)$ : approx. $236 billion - $249 billion $PETROCHINA(00857)$ : approx $230 billion - $273 billion $Total SA(TTE)$ : approx $170 billion - $206 billion $ConocoPhillips(COP)$ : approx. $135 billion - $152 billion In short, based on a main thesis of geopolitics and higher crude prices from the US-Iran conflict, above stocks should generally benefit in the same direction as Brent and WTI. With different sensitivity (of course !) depending on the stock’s business mix. For a US investor, SHEL and TTE will be the easiest non-US large-cap alternatives to study alongside PetroChina. Agree ? Remember to check out my other posts. (See below). Help to Repost ok, Thanks. Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. INTC : Q2 Earnings is Proof of Return ? NFLX, chance to Rise with Q2 Earnings ? NVDA - Buy the Rumour before Too late ? Do you think Energy stocks will be the star performer by end 2026 ? Do you think any semblance of peace will be forthcoming to halt US market decline ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents