Energy markets reprice after easing Middle East tensions: Why are oil stocks showing resilience?

On April 22, 2026, the ceasefire agreement related to the Iran-related conflict was extended again. Crude oil prices, which had surged sharply amid heightened tensions in the Strait of Hormuz, clearly retreated from their highs above $105. By conventional logic, the easing of the geopolitical risk premium should weigh on oil stocks in tandem; however, reality presents a markedly different picture. Instead of backing off, the options market piled up even more crowded bullish positions, and after pulling back to key moving averages, many oil company stocks quickly found renewed support.

Divergence Signals Under a Surge in Options

The sharpest contrast appears in the fund options positions tracking Brent crude futures. On March 25, when Brent crude was still hovering above $105 at the conflict peak, the fund’s put-to-call open interest ratio stood at 0.24—about 4 call options for every 1 put option—matching the market’s broadly risk-averse positioning and hedging against war premiums.

After the ceasefire extension on April 22, geopolitical panic had receded significantly. If before this, the long side had only been betting on short-term supply disruptions, this ratio should have risen markedly. Yet the actual data moved in the opposite direction: the open interest ratio fell further to 0.17, with the number of call options reaching nearly 6 times the number of put options; the intraday trading volume ratio tightened even further to 0.05. At the same time, option pricing remained in a historically high range, indicating that funds were paying higher premiums to maintain and layer on bullish exposure.

According to Gate market data, as of April 24, 2026, U.S. crude oil XTI was quoted at $96.57, and Brent crude XBR at $100.27, with intraday gains of 3.57% and 3.63%, respectively. As prices stabilized, funds tilted even more densely toward oil assets. This divergence is a core clue for interpreting this round of market action.

From Geopolitical Premium to Fundamental Valuation

Looking through the key milestones, the shift in narrative focus is clearly visible:

• Late March: The Iran–Israel conflict escalated; Brent broke above $105. The market flooded in for war-premium hedging, with the options ratio at 0.24.
• April 17: The first ceasefire news emerged. The crude oil risk premium began to loosen, and related stocks pulled back from their highs.
• Around April 20: ExxonMobil and ConocoPhillips stopped falling near key moving averages, and signs of capital inflow appeared.
• April 22: The ceasefire extension was confirmed. Most of the war premium faded, while the bullish-to-bearish options ratio dropped to 0.17, and deeper buy-side demand emerged.
• April 23–24: Gate market data shows crude oil rebounding modestly. Oil stocks recovered in step, and some targets approached key Fibonacci resistance levels.

This timeline suggests that market participants, in the transition from “event-driven” to “value assessment,” are reallocating capital into energy assets that can generate sustainable cash flows.

Low-Key Inflows of Institutional Capital

ExxonMobil’s price chart shows a particularly typical pattern of institutional accumulation. In the week of April 17, the stock slid back from recent highs to near the 100-day exponential moving average, and that moving average then formed solid support; the price rebounded to above $149. During the rebound, volume remained steady, with no surge in panic selling and no speculative spikes. The Chaikin Money Flow (CMF) indicator formed a bottom divergence with the price during this period—while the price was under pressure, CMF gradually moved higher, indicating that professional investors were taking in shares amid weakness. Wall Street research firms also echoed this view: in early April, as the ceasefire situation became clearer, they maintained buy ratings for ExxonMobil, with the target price adjusted only slightly down to $172. The main rationale was that the company returned $37.2 billion to shareholders via dividends and buybacks in 2025, and it committed to a $20 billion buyback plan in 2026. The large-scale capital return effectively acts as a natural “floor” for the stock price.

Valero Energy, meanwhile, follows a different logic. As a pure downstream refiner, its profits come from the crack spread between crude oil and refined products. In its April report, the International Energy Agency noted that global refining capacity in 2026 will decrease by about 1 million barrels per day. With fuel supply staying tight, crack spreads therefore refresh historical highs. After pulling back, Valero’s stock price regained levels above the 50-day EMA and began testing the 20-day EMA. Institutional reports state that, due to strong refining profits and an approximately $5 billion shareholder return plan, the company has been included in the energy dividend “favorites” list.

ConocoPhillips’ setup centers on low-cost upstream assets. Its stock rebounded quickly from touching $112 to above $121, and CMF confirmed a return above the zero line. During the same period, the in-the-market put-to-call options ratio compressed from 0.75 to 0.36, showing that short positions were exiting in a hurry. The company’s Q1 earnings report is scheduled to be released on April 30; the probability of beating expectations is relatively high, and the market has already been pricing in this outlook in advance.

Consensus Amid Threefold Divergences

Current market discussions on oil stocks are concentrated on three dimensions:

First, debate on demand-side risks. Some argue that if global economic growth slows, the current oil price level’s middle range may be unsustainable, and energy stock valuations will face pressure.

Second, structural divergence on the supply side. More institutions point out that upstream capital expenditures have been insufficient for consecutive years. Even if short-term conflicts ease, medium-term supply tightness is difficult to reverse; combined with refining bottlenecks, the bottleneck effects across the entire energy chain will support stock prices.

Third, repricing of shareholder returns. Under the energy transition narrative, oil companies tend to return cash to shareholders rather than pursue aggressive expansion. This strategy forms the long-term underlying logic behind call option demand.

Even so, mainstream institutions’ April reports show a clear consensus: regardless of how oil prices fluctuate in the short term, companies with strong balance sheets and high shareholder payouts are being re-included in long-term allocation portfolios.

Has the War Premium Really Faded?

One popular simple attribution needs to be distinguished: “Oil stocks are only rising because of the war.” On the factual level, the ceasefire has been substantially advancing; compared with the March highs, Brent crude has clearly retreated, and the implied volatility structure in the options market also indicates that tail risks are diminishing. This means that the visible war premium is indeed receding.

However, funds have chosen to amplify bullish exposure at this moment. This counterintuitive behavior indicates that traders are not betting on another round of geopolitical conflict, but rather building durable value based on crack spreads, supply discipline, and capital returns. In other words, “war premium fading” is an accurate fact, but it does not constitute a sufficient condition for oil stocks to fall back. Instead, it has become a window to test the quality of fundamentals. It’s also worth noting that the high option premiums at present imply that the cost of bullish strategies is not low; absent drivers that extend far beyond the conflict cycle, speculative positions would not cluster at such density.

Industry Impact Analysis: Refining Bottlenecks and the Reshaping of Capital Discipline

Oil stocks’ resilience and upward movement are changing how capital is allocated within the energy sector. Downstream refining and processing companies have become the new focus because crack spreads are at historical extremes. Upstream independent producers, supported by low costs and production elasticity, are attracting defensive capital. Integrated energy majors build a margin of safety through full-supply-chain synergies and ultra-large-scale buybacks.

This phenomenon also affects cost expectations in fuel-intensive industries such as shipping and aviation. Persistent tight refining capacity may reduce the sensitivity of refined product prices to crude oil fluctuations, causing downstream users’ fuel costs to remain stuck at elevated levels. For investment portfolios, the valuation discount of oil stocks versus tech stocks is narrowing, and some funds have started shifting energy weights from “tactical bets” to “strategic allocations.”

Conclusion

The ebb and flow of the war premium often obscures the deeper currents beneath the surface. When call options pile up densely after the ceasefire, and institutional capital quietly takes over as share prices revisit key moving averages, the message the market is sending is clear: the pricing weight of oil assets is shifting from geopolitical headlines to a more durable framework built on supply bottlenecks, capital discipline, and shareholder returns.