Cook: Stock Market Tied to U.S.-Iran Conflict, XOM Will "Take Out Previous Highs"

Ben Cook, portfolio manager at Hennessey Energy Transition Fund, discusses the impact of the Iran-Israel conflict on oil prices and energy stocks. He expects oil prices to rise due to supply disruptions (10M bpd crude, 3M bpd refined products) and sees Exxon Mobil as a key beneficiary. He also covers Williams Companies and Expand Energy, highlighting long-term natural gas demand growth from AI and LNG exports.

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Cook: Stock Market Tied to U.S.-Iran Conflict, XOM Will "Take Out Previous Highs"

XOM

wti

If we had peace today in the Middle East, then we'd likely see oil back around 80-85 dollars per barrel, but not likely for probably 6-9 months.

Nicole

Oil has moved up over a dollar this morning to $91, driven by Iran war headlines. Asks for thoughts on the energy story and which stocks can outperform.
Ben Cook

This is a headline-driven market. The conflict in the Middle East is causing supply disruptions: ~10 million barrels/day of crude oil and ~3 million barrels/day of refined products are not reaching the market. Price will be a function of magnitude and duration of the outage. Expects prices to move up if no near-term resolution.
Nicole

Asks about Exxon Mobil's expected reaction over the next few months and its outlook.
Ben Cook

Exxon Mobil is a great way to play volatility. Expects very healthy returns in Q2 due to rising crude oil, refined products, and natural gas prices. The company has strong upstream growth in Guyana and U.S., and a global refining footprint that benefits from higher refined product prices.
Nicole

Notes Exxon stock is down 3% month-to-date from a high of $176 to ~$149. Asks if the high is attainable in 12 months.
Ben Cook

If supply outage continues through June into July, inventories and SPR will be run down, forcing oil prices higher. If oil goes to $120-150, Exxon could easily take out previous highs.
Nicole

Asks about Williams Companies and whether it follows the same oil price correlation.
Ben Cook

Williams benefits from elevated hydrocarbon complex, but its key story is increased natural gas consumption in the U.S., infrastructure build-out for power generation, and participation in data center/AI compute demand growth. Likes the growth visibility and earnings at Williams.
Nicole

Asks about Expand Energy (EXE), noting Barclays downgraded to equal weight with a $110 target (from $127). Current price is $93.
Ben Cook

Expand Energy has a preferred footprint in the Haynesville Shale and Appalachian Basin. Seasonal natural gas trends have been bearish, but long-term demand is very strong with ~25% growth expected by end of decade from LNG exports and power generation. A higher price signal will be needed to incentivize drilling.
Nicole

Cites Marco Rubio saying talks have made progress. Asks how quickly oil could fall to $80s, $70s, or $60s if the conflict is settled.
Ben Cook

If immediate peaceful resolution and Strait of Hormuz resumes, crude prices would back off. Base case: elevated new floor for crude oil due to global inventory drawdown. If peace today, oil likely back to $80-85/barrel, but not for 6-9 months. Unlikely to revert to pre-conflict levels of high $50s-mid $60s.

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