The current rally in oil and gas stocks in 2025 is significantly fueled by the escalating situation in the Middle East, particularly the war between Israel and Iran. This geopolitical tension has resulted in a substantial increase in commodity prices for oil and gas, which is directly reflected in the rising share prices of related stocks.
Background of the Rally
- Conflict in the Middle East: The war has led to attacks on Iranian energy infrastructures, including nuclear facilities and key production sites like the South Pars gas field – the largest in the world – and refineries such as Fajr Jam. These attacks cause significant damage to Iran’s production and logistics facilities.
- Strategic Importance of the Strait of Hormuz: Iran controls the Strait of Hormuz, a critical chokepoint for global oil and gas trade. About one-fifth of the world’s traded crude oil and roughly one-third of LNG throughput passes through this passage. A possible blockade or restriction here would severely tighten supply.
- Market Dynamics: The scenarios of supply tightness lead to increased volatility in commodity prices with strong upward movements (oil prices temporarily rose by 7%, European gas prices by over 6%). The seasonal demand curve also supports rising prices in the summer months of July to September.
Impact on Investors
For investors, these developments are highly relevant, as oil and gas stocks strongly correlate with commodity markets. Despite some companies having investments in renewable energy sources, price developments in the energy market continue to dominate the price movements of these stocks. Quarterly results play a subordinate role; rather, investors primarily focus on the development of crude oil prices as the main driver for their decisions.
In summary, it can be said that the current rally in oil and gas stocks is triggered by a combination of geopolitical tensions in the Middle East conflict, strategic control of key transport routes, and seasonal demand trends. This creates an environment of high volatility but also opportunities for investors in this sector.