What Happened?

A number of stocks jumped in the afternoon session after renewed fighting across the Middle East, and a larger-than-expected drop in U.S. crude stockpiles reinforced concerns over oil supply. 

Crude oil futures jumped more than 6%—snapping a three-day losing streak—as renewed fighting across the Middle East and a larger-than-expected drop in U.S. crude stockpiles reinforced concerns over a global supply squeeze. 

The primary driver of the rally was the collapse of a four-day truce, marked by escalating hostilities between Iran and the U.S. Iran carried out a missile attack on a U.S. base and fired on tankers in the Strait of Hormuz, a critical chokepoint for global energy supplies. In response, U.S. and Saudi Arabian forces launched retaliatory strikes on Iran-aligned militias in Iraq. These developments revived fears of a wider regional conflict that could severely disrupt the flow of oil, sending Brent crude futures above $90 a barrel and West Texas Intermediate (WTI) climbing past $84 a barrel. 

Adding fundamental support to this geopolitical rally, a report from the American Petroleum Institute (API) highlighted continued tightness in the domestic market. The API estimated that commercial crude oil inventories in the United States fell by 3.3 million barrels in the week ending July 24. A decrease in these stockpiles typically signals that demand is outpacing supply, putting upward pressure on prices. If confirmed by official government data, this draw would leave U.S. crude stockpiles at their lowest level for this time of year since 2018, providing a powerful dual tailwind for the energy sector alongside the Middle East tensions.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• U.S. Shale E&P company Chord Energy (NASDAQ: CHRD) jumped 5.4%. Is now the time to buy Chord Energy? Access our full analysis report here, it’s free.
• Mixed or Offshore Upstream E&P company Murphy Oil (NYSE: MUR) jumped 5.2%. Is now the time to buy Murphy Oil? Access our full analysis report here, it’s free.
• Infrastructure company Genesis Energy (NYSE: GEL) jumped 3.7%. Is now the time to buy Genesis Energy? Access our full analysis report here, it’s free.
• Diversified Upstream E&P company ExxonMobil (NYSE: XOM) jumped 3.1%. Is now the time to buy ExxonMobil? Access our full analysis report here, it’s free.
• Diversified Upstream E&P company ConocoPhillips (NYSE: COP) jumped 3.8%. Is now the time to buy ConocoPhillips? Access our full analysis report here, it’s free.

Zooming In On Chord Energy (CHRD)

Chord Energy’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 20 days ago when the stock dropped 3.5% on the news that crude oil prices pulled back from the previous day's rally. West Texas Intermediate (WTI) crude fell 2.2% to settle near $71.88 per barrel, while the international benchmark Brent crude slipped below $77 per barrel. The pullback occurred despite the U.S. military confirming secondary strikes on Iran and President Trump declaring the recent ceasefire "over." Instead of pricing in further escalation, investors took profits as satellite vessel tracking data indicated that tanker traffic through the Strait of Hormuz was quietly continuing despite the geopolitical rhetoric. The session confirmed that the energy sector's valuation was being dictated almost entirely by the geopolitical risk premium in the Middle East, rather than underlying supply and demand fundamentals.

Chord Energy is up 43.2% since the beginning of the year, but at $135.56 per share, it is still trading 9.4% below its 52-week high of $149.65 from May 2026. Investors who bought $1,000 worth of Chord Energy’s shares 5 years ago would now be looking at an investment worth $1,480.

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