27 April 2026
If you are covering the ongoing oil supply shock and which energy stocks are set to benefit, please see the following comment from Maurizio Carulli, global energy analyst at Quilter Cheviot:
“The prolonged closure of the Strait of Hormuz has removed roughly 12% of global oil supply from the market, according to the IEA, a bigger disruption than the Yom Kippur war, the Iran‑Iraq conflict, the invasion of Kuwait or even the fallout from Ukraine. About a fifth of the world’s oil normally passes through Hormuz, and while some Saudi exports have been rerouted, the scale of the shortfall is unprecedented in modern energy markets.
“That explains why oil prices have stayed higher for longer than many expected, and why energy equities have responded so decisively.
“Higher prices translate very quickly into stronger cash flows and earnings, and we’re seeing that reflected across integrated oil majors, US shale producers and even refiners. Elevated oil prices act like a rising tide for the sector, lifting almost all boats, even as other parts of the market worry about growth and inflation.
“The usual shock absorbers simply aren’t working. Under normal circumstances, Opec would step in to smooth price spikes by opening the taps. This time, the members with meaningful spare capacity, notably Saudi Arabia and the UAE, depend heavily on Hormuz for exports themselves. Until tanker traffic through the strait is safe again, Opec’s ability to stabilise prices is sharply constrained, while US producers have gained outsized influence.
“The bigger risk is what happens if disruption becomes physical rather than financial. So far, markets have been cushioned by inventories and strategic reserve releases, including roughly 400 million barrels from G7 stockpiles. That has bought time, not resolution. If the closure drags on and reserves are run down, price moves could become non‑linear, with genuine shortages emerging. At the same time, demand destruction remains a tail risk with most economists putting the threshold at around $140 a barrel, a level where consumers and industry start changing behaviour.
“The macro consequences are uncomfortable but not yet decisive. As a rule of thumb, every sustained $10 rise in the oil price adds around 30 to 40 basis points to inflation in developed economies and trims 10 to 30 basis points from GDP growth. Equity markets, however, tend to track corporate earnings more closely than GDP alone, which helps explain why stock markets have remained relatively resilient despite the energy shock.
“Clear winners are already emerging. Integrated majors such as BP, Shell, TotalEnergies, ENI, Chevron and ExxonMobil are benefitting from a price uplift that could add 5-10% to operating cash flow for every $10 increase in oil prices. Pure-play explorers and producers, particularly US names with limited Middle Eastern exposure such as EOG and ConocoPhillips, see even greater leverage. Refiners, counter‑intuitively, are also benefiting as product shortages push margins higher. Oil services firms face near‑term disruption in the Gulf but are likely to be significant beneficiaries of reconstruction and global spare‑capacity investment.
“Longer term, there may be an unexpected political side‑effect. After years under pressure, renewable energy is back in focus as governments are reminded that energy security and energy independence are not abstract concepts.”
