Current Developments
The current rally in oil and gas stocks in June 2025 is mainly driven by geopolitical tensions in the Middle East, particularly the war between Israel and Iran. This conflict has led to a sharp rise in oil and gas prices, which directly impacts the stock prices in this sector.
Reasons for the Rally in Oil & Gas Stocks
- Geopolitical Escalation: The war between Israel and Iran has resulted in attacks on Iranian energy infrastructures such as the South Pars gas field as well as refineries and ports, threatening the supply of fossil energy sources.
- Supply Shortage Scenarios: Iran’s control over the Strait of Hormuz, which is a choke point for one-fifth of the world’s traded oil, increases the risk of supply shortages.
- Seasonality: The seasonal increase in demand, which historically drives up oil prices from July to September, provides further momentum.
Market Reactions
- Oil prices have risen sharply, e.g., by 7%, while European gas prices increased by over 6%.
- Companies like Chevron are showing technical strength with bullish signals such as a recently formed Golden Cross.
Significance for Investors
Oil and gas stocks are strongly correlated with commodity markets. Although some companies are investing in renewable energy sources, developments in the energy market dominate their price movements. Investors are focusing on the trend of commodity prices.
In summary, the current rally in the oil & gas sector is closely linked to geopolitical risks and seasonal trends, offering high volatility and opportunities in the sector.