COP ConocoPhillips : Bullish and Bearish Analyst Opinions

The speaker reported that oil stocks, the majors, are advancing, with Exxon Mobil up 1.8% and ConocoPhillips up 1.6%. The ongoing conflict in the Middle East has shut the Strait of Hormuz, a critical oil chokepoint, driving up crude oil and fuel prices (Brent ~$102, diesel >$5). Major integrated oil companies are direct beneficiaries of higher hydrocarbon prices, leading to immediate stock price appreciation. A rapid diplomatic resolution that reopens the strait and normalizes oil flows, collapsing the geopolitical risk premium.

"U.S. war on Iran entering its third week... WTI crude lower after hitting $102 per barrel... energy markets still front and center." Also, "sliding oil prices lifting stocks and bonds in hopes that more tankers will be able to get through the Strait of Hormuz." The ongoing military conflict directly threatens the flow of oil through the Strait of Hormuz, a critical transit point. While prices are volatile day-to-day on hopes of a resolution, the geopolitical risk premium is structurally higher as long as the war continues. Major integrated oil companies with global production benefit from elevated prices and have the scale to navigate regional instability. LONG major oil producers as a hedge against prolonged Middle East supply disruption and sustained higher oil prices. A rapid de-escalation of the conflict could cause oil prices to collapse. A global recession could destroy demand.

literally a single terrorist can put something in the water or shoot something or shoot a missile, a small missile, and it's fairly close range because it is a tight area and which is one of the reasons they've always used that as a weapon. The Strait of Hormuz remains a highly vulnerable chokepoint for global energy markets. While the US imports less than 1 percent of its oil from this region, oil is a globally priced commodity. If a disruption occurs, global crude prices will spike. Large US domestic oil producers will capture massive margin expansion from higher global prices without facing the physical supply chain risks and geopolitical threats that Middle Eastern producers face. LONG. US exploration and production companies offer a geopolitical hedge, benefiting from global energy price spikes while operating in secure domestic basins. A rapid de-escalation of Middle Eastern tensions or a global macroeconomic slowdown could suppress baseline oil demand and prices.

"President Trump has been advocating strongly for a new liquid LNG facility, a pipeline that would run alongside the Trans-Alaska Pipeline... to deliver that crude oil to Asia, to Japan, uninterrupted." Asian nations are actively diversifying away from Middle Eastern energy due to geopolitical risks (such as the fall of the Iranian regime) and long transit times. Major US LNG exporters (Cheniere Energy) and dominant Alaskan oil producers (ConocoPhillips, which operates the massive Willow project) will capture this structural shift in Indo-Pacific energy procurement, backed by $50 billion in new regional deals. LONG. US energy exporters and Alaskan producers are structurally advantaged by the geopolitical pivot to the West and fast-tracked federal export permits. A sudden de-escalation and stabilization in the Middle East could lower global energy prices, making US exports less competitive, or future administrations could revoke these fast-tracked export permits.

"Many traders are not ruling out even a 150 benchmark if the war and the strait remains blocked for some time... previous releases from the reserve have had a larger impact... it's a little bit surprising that there hasn't been more movement." If massive strategic reserve releases and minor domestic production bumps (like invoking the Defense Production Act in California) cannot offset geopolitical supply shocks, oil prices have established a structurally higher floor. US domestic energy producers will generate massive free cash flow in this sustained high-price environment without taking on the geopolitical risk of operating in the Middle East. LONG US energy producers as they directly benefit from elevated global crude prices driven by inelastic supply constraints. A sudden diplomatic resolution unblocking the Strait of Hormuz or ending the war in Ukraine could rapidly flood the market with supply and crash crude prices.

Approximately 20 million barrels per day of crude oil and petroleum products transit the strait equating to about 20% of global petroleum consumption. A blockade chokes off a fifth of the world's oil supply. This massive supply shock forces global buyers to bid up available barrels, directly increasing the spot price of crude oil and expanding profit margins for Western oil majors operating outside the conflict zone. LONG. US-based oil producers will capture the immediate upside of the supply shock without facing the localized geopolitical risks of Middle Eastern producers. Strategic Petroleum Reserve (SPR) releases or a rapid diplomatic resolution could quickly erase the geopolitical risk premium in oil prices.

We have estimated if the disruptions persist for closer to three months, you can see oil well above $150 a barrel, and we estimate close to $164. Government interventions like waiving the Jones Act and releasing SPRs only provide a temporary 20-day cushion. If the conflict drags on, the physical supply shock will overwhelm these mitigations, driving crude prices and major US oil producers significantly higher. LONG. The market is currently underpricing the duration risk of the Strait of Hormuz closure. Backchannel negotiations successfully reopen the Strait to all vessels, or a sudden ceasefire collapses the geopolitical risk premium in oil.

The whole oil complex is repricing conflict risk constantly. Scarcity is in focus. Chevron, Exxon, Occidental, ConocoPhillips are higher off the back of the oil price moving higher and staying higher. The closure of the Strait of Hormuz is a structural supply shock that cannot be quickly resolved by strategic petroleum releases. Sustained $100+ oil directly inflates the free cash flow and profit margins of major unhedged Western energy producers. LONG. Geopolitical premiums are becoming entrenched in the oil market, providing a massive tailwind for US energy majors. A sudden diplomatic resolution or military de-escalation that reopens the Strait of Hormuz would cause a rapid unwinding of the geopolitical risk premium in oil prices.

"We are still looking at at least 13 to 15 million barrels a day missing from the market... The real issue is the flow rate. They are not able to put as much oil onto the market as we would need to make up for the shortfall." With the Strait of Hormuz closed and Middle Eastern supply trapped, global oil prices will remain structurally elevated. US-based exploration and production companies (E&Ps) with assets outside the conflict zone will capture massive windfall profits from the price spike without suffering the localized supply chain blockades. LONG. US energy majors are perfectly positioned to benefit from the geopolitical supply vacuum and sustained $100+ crude prices. A sudden diplomatic resolution or internal regime change in Iran that immediately reopens the Strait of Hormuz, crashing the geopolitical risk premium in oil.

"We're an oil producer... the oil companies are going to benefit from higher oil prices." While high oil prices drag down the broader economy and consumer stocks (creating stagflation), domestic energy producers capture the direct upside of the commodity shock. They offer a natural portfolio hedge against the exact sticky inflation that is pressuring the rest of the market. LONG US energy majors to capitalize on surging oil prices and insulate portfolios from broader stagflationary drags. Geopolitical tensions ease leading to a sudden drop in crude oil prices, or a severe recession destroys global oil demand.

West Texas Intermediate crude up now by about 8.5 percent. Brent at 99.24 a barrel. Exxon Mobil up 1.7 percent. Chevron up 3.3 percent. The effective closure of the Strait of Hormuz creates a severe supply bottleneck that cannot be quickly resolved by SPR releases alone. This geopolitical premium will sustain high oil prices, directly expanding profit margins and free cash flow for major US domestic oil producers. Go LONG on major US energy producers and broad energy sector ETFs as they are the primary beneficiaries of the ongoing Middle East supply shock. A sudden diplomatic resolution, regime change in Iran, or a severe global recession that destroys oil demand.

"The straight of Hormuz is effectively closed. More than 150 commercial ships are stranded... Roughly 18 million barrels of oil per day normally transit the straight and most of that supply is now gone." The removal of 20% of the global daily oil supply creates an immediate and severe structural deficit. While the 400 million barrel SPR release provides a short-term buffer, the underlying supply shock will keep crude prices elevated. Domestic US producers with no Middle East exposure will capture massive margin expansion without the geopolitical operational risk of operating in the Persian Gulf. LONG. US-based exploration and production companies will benefit from sustained high oil prices driven by the de facto naval blockade. The US Navy clears the sea mines faster than expected, or the SPR release successfully suppresses prices long enough for a diplomatic resolution.

"We went to work last year, over 6100 permits in just nine months... American companies over the last weeks and months... are all announcing that they've increased production." The federal government is actively removing bureaucratic bottlenecks and accelerating mineral leasing on public lands. This highly favorable regulatory environment ("Drill, baby, drill") allows US Exploration & Production (E&P) companies to deploy capital efficiently, increase production volumes, and generate massive free cash flow while global oil prices remain elevated near $90 a barrel. LONG US oil majors and broad energy equities as they directly benefit from deregulation and volume growth. If global macroeconomic conditions deteriorate and cause a severe recession, the resulting collapse in oil demand and prices would offset the benefits of increased production volumes.

"The US is now a net energy exporter, so any uplift in energy prices is money moving for the most part from New York and California to Texas and Oklahoma and Louisiana." Elevated global energy prices caused by Middle East supply disruptions act as a direct wealth transfer to US energy-producing regions. Domestic exploration and production companies will see significant free cash flow generation without bearing the geopolitical risks of holding physical assets in the Middle East. LONG US energy producers as they capitalize on elevated global oil and gas prices driven by geopolitical premiums. The US government could aggressively release strategic petroleum reserves or waive the Jones Act, artificially suppressing domestic crude prices.

"US military operations have not yet meaningfully degraded Iran's ability to disrupt Strait of Hormuz traffic... barring a cease-fire and the resumption of Strait of Hormuz flows, crude oil could get back into the mid 100s." The market has aggressively priced in a de-escalation and successful US Navy intervention, causing a 15% drop in crude prices in a single day. However, the physical reality is that the Strait remains a severe chokepoint vulnerable to asymmetric Iranian attacks (electronic jamming, hidden missiles). If the US Navy escorts fail or the conflict drags on longer than the White House projects, the geopolitical risk premium will violently reprice oil back to the upside. LONG. The massive intraday pullback offers a tactical entry point into crude and major producers before the reality of a prolonged, structural closure of the Strait sets in. The US Navy successfully and safely secures the Strait, or the US and G7 coordinate a massive release from their Strategic Petroleum Reserves, flooding the market and crushing prices.

"If there is a presupposition in the markets that it will remain closed for two months to three months, we could see prices rise much higher... that could put prices well above 110." The Strait of Hormuz is a critical global energy choke point. If Iran continues to hold shipping at risk and the conflict drags on, the geopolitical risk premium on oil will expand significantly. This directly benefits crude tracking funds and major oil producers who will capture higher margins on existing production. LONG. Prolonged supply disruptions in the Middle East provide a strong fundamental catalyst for oil and energy equities. The U.S. and Iran could reach a sudden diplomatic resolution, or the U.S. could release massive amounts from the Strategic Petroleum Reserve, causing oil prices to crash.

"Until the Strait of Hormuz is sustainably looking like it's going to be open... this is going to keep on getting worse and worse." The Strait of Hormuz is the world's most critical chokepoint for crude oil. Prolonged closure or military threat will severely constrain global supply, keeping oil prices elevated well above $100 per barrel. Large-cap energy producers will see direct margin expansion and massive free cash flow generation from this sustained geopolitical premium. Long major energy producers as a direct hedge against Middle East escalation and supply constraints. The G-7 successfully floods the market with strategic reserves, or a sudden ceasefire removes the geopolitical premium on crude.

The Strait of Hormuz is effectively closed due to the US-Iran war. Tankers are sitting idle, and Qatar has shut down LNG production. Prices are ~$91 but could hit $120 quickly. This is a classic supply shock. While global demand might be softening (weak jobs), the physical inability to move 20% of the world's oil overrides demand concerns. US producers (Exxon, Conoco) with domestic reserves and export capability become the primary safe suppliers to a starved global market. Long the commodity (USO) and the US majors (XOM/COP) who can actually deliver barrels. Sudden peace treaty or US government intervention (price caps/export bans).

"Crude oil not looking good... getting ready to just break out. There's such a thing as a quad top." Later notes traffic in the Strait of Hormuz has plunged 95%. The technical setup (quad top breakout) combined with the fundamental catalyst (war in the Middle East/supply choke points) creates a high-probability upside for oil. If oil rips, major US producers (XOM, CVX, COP) are the direct beneficiaries. Long exposure to energy is the primary hedge against the "WW3" narrative. De-escalation in the Middle East causes a rapid price collapse.

Oil majors (Exxon, Conoco, Halliburton) are trading down despite news of war with Iran and potential Strait closures. In 1991, once the shooting started, oil stocks "rolled over" and collapsed as the war premium evaporated. The current price action suggests the market believes the conflict will be contained or short-lived. Avoid oil stocks as they are likely to underperform or "collapse" as the geopolitical risk premium exits the market. Escalation in the Middle East actually closes the Strait of Hormuz for a prolonged period.

Despite news of a broadening war with Iran and potential blockades, major oil stocks are down 1-2%. Cramer notes, "The price of crude has seen its peak." Oil stocks are a leading indicator. If they are selling off during war headlines, the market is pricing in a quick resolution or a "defanged Iran" rather than a supply shock. The fear premium is evaporating. The bull case for oil (supply constraint) is being rejected by the market. Expect prices to revert to pre-war levels. The market could be wrong; if the Strait of Hormuz actually closes, oil would spike to $100+.

Charlie Pellett reports WTI Crude is up 6.1% and "Oil majors all getting [a bid] today," specifically naming Exxon Mobil (XOM) and ConocoPhillips (COP). Jamie Dimon notes that if the war is prolonged, "all bets are off" regarding oil prices. The U.S. attack on Iran and the potential closure of the Strait of Hormuz creates an immediate supply shock. In a kinetic war scenario involving a major oil producer, capital flees to upstream producers (XOM/COP) and the commodity itself (USO) as a hedge against stagflation. LONG Energy Majors and Oil Futures. A quick ceasefire or diplomatic resolution causes a rapid deflationary unwind in oil premiums.

"The people that lost assets in the before are all in active dialogues right now... How to get some recompense for that money they're owed and hopefully entice them to come back." Exxon (XOM) and ConocoPhillips (COP) had billions in assets nationalized by the previous regime. The new administration is actively negotiating settlements to bring them back. This implies a dual catalyst: potential cash settlements for past losses and preferential access to the world's largest crude reserves for future growth. Long US majors negotiating re-entry. Negotiations may stall; terms of re-entry may require heavy upfront capital expenditure.

Energy Secretary Wright confirms "active dialogues" regarding companies that lost assets in Venezuela (specifically answering a question about ConocoPhillips). He states the goal is to make Chinese/Russian influence "very small" and entice Western companies back. If the US government is politically backing the restitution of assets to US oil majors in Venezuela to secure supply and geopolitical alignment, companies like ConocoPhillips (COP) stand to recover written-off assets or gain access to cheap reserves. LONG. Geopolitical tailwinds are shifting in favor of US legacy energy producers. Venezuela's political instability or failure to honor new agreements.

US Energy Secretary Wright states Chevron is being enabled to "massively grow their business" in Venezuela with production rising over the next 18-24 months. Anchors note a breakout in "AMP stocks" like ConocoPhillips and EOG. The geopolitical shift and removal of sanctions/regime change in Venezuela directly benefits US oil majors with legacy assets there. Chevron is the primary beneficiary, but the "spigots opening" lifts the peer group. LONG US oil majors with Venezuela exposure or E&P breakout potential. Political instability in Venezuela; oil price volatility.

1. THE FACT: Colombia is next in the "Javier Milei" trend. 2. THE BRIDGE: This implies a potential shift towards libertarian/pro-market policies in Colombia, which could be bullish for Colombian equities and the local currency, similar to the market reaction seen in Argentina under Milei. 3. THE VERDICT: Colombia potentially following "Javier Milei" trend, suggesting pro-market policy shift.

1. THE FACT: Atlas Intel poll for Colombia’s May election shows "Far-right" Abelardo de la Espriella at 44% vs. socialist Ivan Cepeda at 35%. 2. THE BRIDGE: A shift towards a "far-right" leader in Colombia, following a "Javier Milei" trend, could signal more market-friendly policies, potentially boosting Colombian assets and specific sectors like energy (e.g., Ecopetrol, COP). 3. THE VERDICT: Colombian election poll shows "far-right" candidate leading, potentially signaling a market-friendly shift.

1. THE FACT: Trump wants to lower oil prices to $50 a barrel. 2. THE BRIDGE: A presidential push to significantly lower oil prices would negatively impact the revenue and profitability of oil companies. 3. THE VERDICT: Trump's stated goal of $50 oil is a bearish signal for the oil sector.