Exxon, Chevron Stocks Rise as Iran Hormuz Closure Threat Looms

In the wake of U.S. airstrikes on Iran’s nuclear facilities, global markets have been on edge, particularly the energy sector. The Strait of Hormuz, a vital maritime route for oil shipments, has become a focal point of concern. If Iran retaliates by closing this strategic chokepoint, the consequences for global oil supply and prices could be seismic. Major oil companies like Exxon Mobil and Chevron have already seen their stocks rise, reflecting investor anticipation of higher oil prices. Here’s a closer look at the unfolding situation and its implications.

Escalating Tensions in the Middle East

On June 23, 2025, the U.S. launched airstrikes targeting Iran’s nuclear infrastructure, marking a significant escalation in the long-standing conflict between the two nations. While markets initially reacted with caution, oil prices began to climb as investors weighed the potential for further disruptions. The Strait of Hormuz, through which approximately 20% of the world’s oil passes, is particularly vulnerable. Analysts at Morningstar noted that any blockade of the strait could send Brent crude prices soaring to $120 per barrel, a scenario that would benefit oil producers but strain global economies.

Impact on Oil Companies

Exxon Mobil and Chevron, two of the largest oil companies in the U.S., saw their stocks rise by 1% and 0.7%, respectively, following the news of the airstrikes. This uptick reflects investor confidence that higher oil prices will boost profits for these energy giants. However, the situation is far from straightforward. While oil companies stand to gain in the short term, prolonged disruptions could lead to broader economic instability, potentially offsetting these gains. As Morningstar reported, the U.S. involvement in the Israel-Iran conflict has introduced a significant geopolitical risk premium into the market, keeping oil prices volatile.

Geopolitical Risks and Market Volatility

The potential for Iran to retaliate by targeting energy facilities or U.S. military assets across the Middle East adds another layer of uncertainty. Analysts at UOB suggest that such actions could add an additional $10 per barrel to Brent prices, pushing them toward $90. Meanwhile, Berenberg warns that oil prices may remain elevated as the conflict evolves, with the possibility of significant disruptions to oil and gas exports from the Gulf region. This uncertainty has kept markets on edge, with investors closely monitoring developments in the region.

Broader Implications for Global Energy Markets

The Strait of Hormuz is not just a critical artery for oil shipments; it is also a barometer of geopolitical stability in the Middle East. Any disruption to its operations would have far-reaching consequences, affecting everything from global energy prices to trade relations. As Morningstar highlights, the U.S. Federal Reserve could respond to the inflationary impact of higher oil prices with more restrictive monetary policy, further complicating the economic landscape. For now, the energy sector remains in a state of flux, with oil companies poised to benefit from higher prices but facing significant risks if the conflict escalates further.

In conclusion, the potential closure of the Strait of Hormuz by Iran represents a critical juncture for global energy markets. While oil companies like Exxon and Chevron stand to gain in the short term, the broader implications of such a move could be far-reaching, introducing new layers of uncertainty into an already volatile market.