Oil Prices Jump After Israel Strikes Iran — 2 Top Energy Stocks to Watch Now

Oil prices are surging following a major Israeli airstrike deep inside Iran, which struck a range of high-value military and nuclear sites – from missile installations to refineries and fuel depots. The escalation has rattled global markets, driving WTI crude futures up by nearly 7% as investors brace for potential supply disruptions and broader regional fallout.

In times like these, energy producers with lean, efficient upstream operations and strong capital discipline are in a prime position to capitalize. Elevated crude prices can quickly widen margins, making these companies especially attractive. No surprise, then, that energy stocks are drawing renewed investor interest right now.

Using the TipRanks database, we’ve pinpointed two heavyweight energy names that look poised to benefit from this oil shock. Let’s take a closer look.

ExxonMobil (XOM)

We’ll start with a titan of the global energy sector, ExxonMobil. As the largest oil and gas company in the U.S., it commands a market cap of $483 billion, and over the four quarters ending with Q1 2025, it raked in ~$340 billion in revenue.

The company’s edifice is built on the sound execution of its core business: the discovery, extraction, transport, and delivery of hydrocarbon resources. ExxonMobil is a major global producer of oil and natural gas, and also has a leading role in the petrochemical industry and the production of industrial chemicals. The company is also known for its work with lightweight plastics featuring reduced environmental footprints.

ExxonMobil is working to expand its oil production, the foundation that supports its business edifice. It announced the acquisition of Pioneer Natural Resources in the autumn of 2023, and since then has been integrating Pioneer’s upstream assets into its own network. On an immediate practical level, this gives ExxonMobil an expanded presence in the Texas Permian Basin, one of the richest oil and gas regions in North America. The company is leveraging this position as part of its broader growth strategy and is targeting a total production level of 5.4 million oil-equivalent barrels per day by 2030.

Turning to the financials, we find that ExxonMobil reported $83.13 billion in total revenue for 1Q25, a figure that was roughly flat year-over-year but missed the forecast by $2.96 billion. At the bottom line, the company realized a non-GAAP EPS of $1.76, down 30 cents per share from 1Q24 but 3 cents per share ahead of the estimates.

For Morgan Stanley analyst Devin McDermott, the important point for investors to remember here is that ExxonMobil is simply a solid company with a sound stock.

“Key longer-term growth and cost reduction initiatives are all progressing well. XOM’s scale and integration across the energy, chemicals, and emerging low-carbon value chains support sustainable competitive advantages, above-market growth and a differentiated value proposition within the Energy sector and the broader market. The stock trades at a ~50% discount to the broader market, roughly 1.5x historical levels, despite offering an attractive MSe ~11% earnings CAGR through 2030,” McDermott opined.

McDermott goes on to rate XOM stock as Overweight (i.e., Buy), with a $133 price target that points toward a one-year upside potential of ~19%. (To watch McDermott’s track record, click here)

Overall, this oil giant has earned a Moderate Buy consensus rating from the Street, based on 15 recent analyst reviews that break down 9 to 6 in favor of Buys over Holds. The shares are priced at $112.12 and their $123.07 average price target implies a ~10% gain in the next 12 months. (See XOM stock forecast)

Chevron (CVX)

Next up is Chevron, a major powerhouse in the U.S. oil and gas sector. With a market cap of $255 billion and trailing four-quarter revenue of around $193 billion as of mid-2025, Chevron ranks as the second-largest U.S. energy major after ExxonMobil. Chevron’s operations span the full energy spectrum – from upstream exploration and production to the development of new hydrocarbon reserves. It also runs a vast transportation network, including a maritime fleet.

Chevron has an active expansion program, seeking new oil and gas assets. The company is known for its large footprint in the Kazakhstan Tengiz oil field near the Caspian Sea, a field that is one of Asia’s major oil production basins. In addition, Chevron is executing a $53 billion deal to acquire Hess, a move that would give Chevron a large entry into the oilfields of Guyana, in the north of South America. The Hess acquisition is being opposed by ExxonMobil and CNOOC, who claim a contractual “right of first refusal” on Hess’s 30% stake in Guyana’s Stabroek Block. The case has gone to arbitration, and a resolution is expected later this summer.

In addition to its work in hydrocarbon extraction, Chevron is also an important producer and distributor of refined fuels, lubricants, and additive chemicals. The company produces these fuels and chemicals as part of its larger petrochemical division, and handles the distribution side through a network of branded gas stations.

Return-minded investors will be interested in Chevron’s commitment to maintaining a substantial capital return. The company has active buyback and dividend programs, and in the first quarter of this year returned $6.9 billion to shareholders. That total included $3.9 billion in share repurchases and $3 billion in dividends. The most recent common share dividend, for $1.71, was paid out on June 10. The annualized rate of $6.84 per common share gives a forward yield of 4.7%.

Chevron’s 1Q25 results were mixed. The company’s total revenues of $47.61 billion were down 2.3% year-over-year and missed the estimates by $780 million. At the bottom line, however, Chevron beat the forecasts; the $2.18 non-GAAP EPS was 3 cents per share better than had been anticipated.

This stock caught the attention of RBC’s Biraj Borkhataria, who tags the shareholder return and Hess arbitration as key points for investors to watch. Borkhataria wrote of the shares, “CVX offers a ~10% total shareholder return (dividends and buybacks), which is higher than its closest peer, with a healthy balance sheet and mid-teens gearing levels. CVX also has one of the lowest capital intensity portfolios among the majors, while we see the positive conclusion to the Hess arbitration as a key catalyst later this year.”

Looking ahead, the analyst rates CVX as an Outperform (i.e., Buy), a rating that is complemented by a $175 price target and a 20% potential gain for the coming year. (To watch Borkhataria’s track record, click here)

Overall, Chevron’s stock has a Moderate Buy consensus rating, based on 18 recent analyst recommendations that include 10 to Buy, 6 to Hold, and 2 to Sell. The stock is trading for $145.91, and its $159.50 average target price suggests a gain of 9% on the one-year horizon. (See CVX stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.