Oil Prices Above $75: 4 Key Players to Watch in a Volatile Market

Tensions across the Middle East have escalated sharply, with Iran warning it could target vessels in the Strait of Hormuz — the narrow corridor that carries roughly one-fifth of the world’s oil supply. Meanwhile, U.S. forces under President Donald Trump are reportedly preparing potential strikes on Iranian missile, drone and naval facilities.

The situation escalated further after reports that a U.S. submarine sank an Iranian warship off the coast of Sri Lanka, significantly raising tensions between Washington and Tehran. The broader U.S.-Israeli campaign against Iran has now entered its sixth day, increasing fears that the conflict could drag on. Iran’s Islamic Revolutionary Guard Corps has warned it could target vessels attempting to transit the Strait of Hormuz, effectively halting commercial shipping through the critical oil corridor.

In response, the U.S. administration has offered risk insurance and naval escorts for commercial vessels traveling through the Persian Gulf while also outlining measures aimed at stabilizing regional energy markets.

The market reaction has been swift. After a drone strike forced Saudi Aramco to halt operations at its massive Ras Tanura refinery, crude prices jumped. When oil spikes due to supply fear, upstream producers — the companies that pull crude out of the ground — are often the first to benefit.

Geopolitics and the Oil Price Multiplier

The Strait of Hormuz is one of the world’s most critical energy chokepoints. Any credible threat to its flow instantly prices risk into crude markets. Even without a full blockade, insurance premiums rise, shipping routes shift and traders front-run potential shortages.

This is textbook supply shock economics. When global inventories tighten and prices rise, upstream producers enjoy operating leverage. That added volatility has already pushed West Texas Intermediate ("WTI") crude above $75, currently flying near $77 per barrel, a move that could materially benefit upstream-focused producers. Their costs do not increase nearly as fast as revenues. Every incremental dollar in oil prices largely drops to free cash flow.

Let's take a close look at four oil companies that are well-positioned to benefit from rising oil prices, including Chevron Corporation CVX, Diamondback Energy FANG, Canadian Natural Resources Limited CNQ and Ovintiv Inc. OVV. In the past three months, the share price of FANG grew 10.8%, followed by CVX with a gain of 22.3%, OVV with 22.4% and CNQ recorded the highest increase of 28.2%. All four companies currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

3-Month Price Performance Comparison

These companies each have unique characteristics and operational structures that allow them to capitalize on the shifting dynamics in the oil market.

Chevron Corporation is one of the world's largest integrated oil companies, with a broad portfolio that extends both upstream and downstream sectors. However, it is the company’s upstream assets, particularly in the Permian Basin and the key international assets, that provide a direct exposure to rising oil prices.

As crude prices increase, Chevron’s upstream realizations improve closely. This boosts its cash margins and free cash flow, allowing for increased earnings. Chevron’s substantial operations in liquefied natural gas and downstream segments provide some natural hedges against volatility. However, sustained strength in crude oil will significantly enhance its earnings potential.

For investors, CVX offers a more stable way to gain exposure to higher oil prices. With its strong balance sheet, the company is able to maintain consistent shareholder returns, including dividends and share buybacks. Chevron is worth focusing on the investors who are seeking a low-risk way to gain exposure to oil upside. As the company benefits from higher crude prices, it continues to enhance financial stability and offers dependable returns in volatile markets. 

Diamondback Energy stands out as a pure-play Permian Basin operator, meaning it has a direct and substantial exposure to rising oil prices. Unlike many of its peers, Diamondback’s cost structure is particularly efficient, allowing a significant portion of any incremental pricing gains to flow directly to the bottom line. As a result, rising WTI prices translate into higher margins and an increase in free cash flow almost immediately.

The company has emphasized capital discipline over aggressive production growth, ensuring that any excess cash generated in a higher oil price environment is directed toward debt reduction, dividends and share repurchases, rather than unnecessary expansion. This conservative approach to capital allocation means that investors are more likely to see strong shareholder returns during periods of oil price strength.

With its high beta exposure to crude, FANG offers investors a compelling play on rising oil prices. For oil-focused investors who want a more aggressive play on crude prices, Diamondback Energy is a company to watch closely.

Canadian Natural Resources is a large integrated energy company with a significant presence in oil sands, which gives it a unique advantage in times of rising crude prices. Oil sands projects tend to have high fixed costs but generate substantial incremental cash flow when benchmark crude prices rise. This is due to the relatively low production decline rates of oil sands assets, which allow the company to sustain elevated free cash generation over extended periods.

CNQ is well-positioned to capture upside in a tightening global supply environment. The company’s scale and extensive reserve depth give it a distinct advantage when oil prices rise. In addition, its long-term approach to capital allocation, focused on disciplined spending, helps protect shareholder value. The company benefits from stable production growth and strong cash flows during periods of high crude prices.

With its established history of generating strong returns for shareholders during oil price cycles, CNQ is a key player for investors seeking exposure to a solid, well-managed company in the oil sands sector. As the global energy market tightens, CNQ is well-positioned to take full advantage of rising prices and deliver long-term value.

Ovintiv is a prominent North American exploration and production company with a strong portfolio of high-quality shale assets. The company holds significant positions in key resource plays such as the Permian Basin, Montney and Anadarko Basin, enabling it to produce substantial volumes of oil, natural gas and natural gas liquids.

Ovintiv’s strategy focuses on developing high-margin assets while maintaining disciplined capital spending and improving operational efficiency. This approach allows the company to generate strong free cash flow when crude prices rise. Because Ovintiv’s operating costs remain relatively stable, higher benchmark oil prices can significantly enhance its profitability.

The company has also prioritized shareholder returns through share repurchases and balance sheet strengthening, making it an attractive option for investors seeking exposure to rising oil prices. The company reflects a balanced growth outlook and the ability to generate solid cash flows in a supportive commodity price environment.

Conclusion

With geopolitical risks rising and global supply appearing tight, crude prices could remain supported in the near term. In that environment, upstream-focused producers with cost discipline and strong asset bases are positioned to benefit. CVX offers stability, FANG provides torque to oil prices, CNQ delivers oil sands leverage and OVV adds shale-driven growth potential, giving investors multiple ways to position for sustained strength in crude.

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This article originally published on Zacks Investment Research (zacks.com).

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