Investing Strategies for Energy Stocks During Iran Conflict

Experts recommend focusing on oil companies that can thrive at lower prices or pipeline firms with stable cash flows.

Mar. 23, 2026 at 7:07am

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The article discusses two investment strategies for energy stocks amid the ongoing conflict with Iran. One approach is to invest in high-quality oil companies like ExxonMobil that can still generate strong earnings and cash flow even if oil prices fall. The other strategy is to invest in pipeline companies such as Kinder Morgan that have limited direct exposure to volatile commodity prices and generate stable cash flows from long-term contracts.

Why it matters

Oil prices have been highly volatile due to the conflict with Iran, creating uncertainty for energy investors. The recommended strategies aim to provide upside potential if oil prices rise further while also protecting against significant downside if prices fall.

The details

The article notes that crude oil prices could continue rising sharply if the Strait of Hormuz remains closed or if Iran retaliates against energy infrastructure. However, prices could also fall significantly if Iran agrees to reopen the Strait or if a peace deal is reached. Investing in oil companies focused on cost savings and advantaged assets, like ExxonMobil, can enable them to thrive even at lower oil prices. Alternatively, pipeline firms with fixed-rate contracts and limited commodity price exposure, such as Kinder Morgan, can provide stable cash flows during the volatility.

  • Oil prices started 2026 around $60 per barrel for Brent crude.
  • Brent oil prices peaked near $120 per barrel more recently.

The players

ExxonMobil

A major oil and gas company that has focused on becoming more profitable by investing in its lowest-cost and highest-margin assets while also delivering structural cost savings.

Kinder Morgan

A natural gas pipeline company that generates 70% of its cash flow from take-or-pay contracts or hedging agreements, providing stable earnings with limited direct commodity price exposure.

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The takeaway

Investors have options to navigate the volatility in oil prices caused by the Iran conflict, including focusing on oil companies that can perform well even at lower prices or pipeline firms with stable cash flows that are less exposed to commodity price swings.