Consumers in the U.S. are paying more at the pump as gas prices have increased again. According to the AAA fuel price tracker, the national average price of gas increased nearly 7 cents overnight. The price of fuel has also risen 27 cents over the past week, 32 cents over the past month, and a whopping $1.12 year-over-year. Gas prices have already surged above those seen in 2008, which were triggered by the war with Iraq, and are quickly approaching the all-time high of $5.032 set in 2022 following Russia’s invasion of Ukraine.
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As gas prices remain close to historic highs, consumers can pin them to another war overseas. This time around, it’s the war with Iran that has caused the price of fuel to skyrocket. The conflict has resulted in the closure of the Strait of Hormuz, a critical shipping route for crude oil from the Middle East. While there have been negotiations to end the war and reopen the Strait of Hormuz, they have failed to reach a conclusion. The price of fuel is expected to increase the longer the war goes on.
The war with Iran isn’t the only reason that consumers have faced increased gas prices. Refineries have also closed down or limited operations for maintenance, which is typical for this time of year. This is a contributing factor to rising fuel prices as it limits the supply from these facilities. This wouldn’t normally result in such a stark increase in fuel prices, but the maintenance period rise is compounded by the war in Iran.
How This Affects Oil Stocks
Oil stocks have largely benefited from the inflated prices at the pump. This has seen major players in the space, such as Exxon Mobil (XOM), Chevron (CVX), ConocoPhillips (COP), EOG Resources (EOG), Occidental Petroleum (OXY), BP (BP), and Schlumberger (SLB), experience strong year-to-date gains. These stocks are likely to continue to perform well so long as the war in Iran continues.
Which Oil Stocks Are Worth Investing In?
Turning to the TipRanks stock comparison tool, traders can see how analysts rate the major oil stocks. The analysts’ consensus ratings come in at Strong Buy for CVX and SLB, Moderate Buy for XOM, COP, EOG, and BP, and Hold for OXY. Looking at the average analyst price targets, Chevron has the highest upside potential at 9.66%, followed closely by Schlumberger at 8.37% and Exxon Mobil at 8.18%.
