Only 1 Sector Is Up Over the Past Month

Only one sector of the S&P 500 index was up in March. You might have guessed it. It was the energy sector. As a group, energy stocks in the index were up about 11.9% for the month. Every other sector in the index was down in March, from utilities (down 4.5%) to healthcare (down 10.6%). The overall S&P 500, by the way, was down about 7.6% for the month.

What’s different about energy stocks? Well, they’re heavily focused on fossil fuels like oil. The price of oil spiked in March due to the Middle East war and the resulting closure of the Strait of Hormuz, through which some 20% of the world’s seaborne oil travels.

Brent crude oil, the international benchmark, is up 55% since the war began in late February. The average price of a gallon of gasoline in the U.S. has climbed more than $1, to about $4 (a national average for regular gasoline), according to AAA.

Image source: Getty Images.

Rising oil and gasoline prices have been very good for energy companies, from upstream exploration and production companies like Occidental Petroleum (OXY 4.14%), which was up 26% in March, to refiners like Marathon Petroleum (NYSE: MPC), up 24.8%, to oil majors like **ExxonMobil **(XOM 4.83%), up 13.3%. The question now is, can energy stocks’ incredible run last?

Energy prices look to remain high for the duration of 2026

Well, it certainly looks to continue as long as the war continues and Iran can continue blocking traffic through the Strait. As I write this, there is no end in sight to either problem.

But when the war does eventually end, what about these stocks? Well, the oil market is currently in a state known as backwardation. That is, current or “spot” prices are higher than future prices. For example, right now (on March 26), a barrel of Brent crude, the international benchmark, is trading at about $113. That’s the spot price. But a barrel of oil for delivery in June costs about $108, falling to around $91 for a barrel in September, and about $88 for a barrel delivered in December.

Among other things, that tells us that the futures market expects oil prices to fall in the coming months. That is, the collective wisdom of the market says that the current spike in oil prices is a temporary situation that will not last long.

Still, the price of a barrel of oil for delivery in December currently stands at $84, well above pre-war levels. That means that the oil companies should have a better 2026 than anyone expected. Oil prices are likely to remain elevated long after the guns go silent, as much energy infrastructure and many strategic reserves have been damaged.

So right now, energy stocks remain attractive, no matter what happens in the geopolitical sphere.