The best energy stocks right now as two major conflicts keep oil prices elevated

Iran/Hormuz shipping risk is flaring alongside Russia/Ukraine refinery strikes, but Deutsche Bank notes the current oil shock hasn’t met historical “risk-off” thresholds (no sustained +50–100% oil spike, no hawkish policy pivot, and no clear macro damage). Meanwhile, the U.S. 10-year yield has pushed back above 4.6% and Fed officials have floated additional hikes tied to inflation risk. On the equities side, energy is only ~3% of the S&P 500 yet ~5% of earnings, with strategists arguing energy earnings could double, while Seaport flags the S&P 500 forward P/E at ~19.5x. Company-specific catalysts include Cameco initiation at a $129 target (+~40%), TeraWulf’s 20-year/+$19B power deal with Anthropic, and New York’s one-year moratorium on new data centers—an AI/data-center demand headwind that could affect “bitcoin-turned-AI power” valuations.

Analysis

The cleanest winner is not crude itself but anything with durable exposure to the product side of the barrel or to scarcity of firm power. That favors integrateds like CVX and COP only modestly, because they are partially hedged by downstream and are the first names the market sells when geopolitics de-escalates; the more convex near-term beneficiaries are refiners such as PBF, PARR, and DK, but they are also the most crowded and the quickest to mean-revert if diesel cracks soften. A less obvious loser is the broad rate-sensitive complex: if oil keeps pushing breakevens higher, 10Y yields can stay sticky, which is a margin headwind for growth multiples and a valuation tailwind for value/energy relative strength.

The market is still underpricing the bar for a true risk-off regime. A sustained drawdown in risk assets likely requires not just headlines, but weeks of elevated oil, a visible hawkish turn from the Fed, or evidence that shipping disruptions are broadening from episodic to structural; absent that, this is more of an inflation scare than a recession signal. The contrarian point is that Russian refinery damage can paradoxically add supply to the global crude market even as it lifts diesel prices, so the most visible geopolitical bullishness may be overstating the net crude shortage. Watch Brent, diesel cracks, and 10Y yields together; if crude spikes but cracks and yields fail to follow, the energy beta trade will fade quickly.

Key Decisions for Investors

• Fade the crowded refining trade: short PBF/PARR on strength over the next 1-3 months, targeting mean reversion in crack-spread names; stop out if diesel margins re-accelerate or Russian refinery outages deepen.
• Accumulate CCJ on pullbacks for a 6-18 month horizon; the catalyst is uranium contract repricing and a higher quality multiple, with downside if contract pricing stalls or policy support slips.
• Add selective exposure to WULF and/or CLSK over 6-12 months as a scarcity-of-power trade; the investment case improves if other states follow New York on data-center permitting tightness.
• Use CVX/COP only as tactical longs on weakness, not chase buys; the trade works best if oil stays elevated for several weeks without a sharp move in 10Y yields or a de-escalation headline.
• Set an alert on Brent, diesel cracks, and U.S. 10Y > 4.6%: if crude rises but rates and product cracks fail to confirm, reduce energy beta and expect the broad market to absorb the shock.