Oil prices rise after US strike on Iran, but oversupply and higher inventories may lower prices

From Morningstar: 2025-06-23 10:05:00

Crude oil prices rose 1% after the US bombed Iranian nuclear sites, bringing a 21% increase in the last month compared to oil equities. Despite the rise, global oil fundamentals remain unchanged, with ample supply meeting strong demand and oil futures suggesting lower prices ahead due to oversupply and higher inventories.

As OPEC plans to increase volumes through the year, oil prices may face pressure. Exxon remains a top pick, trading at a 15% discount to fair value, with potential for earnings growth. BP could benefit from higher oil prices but faces challenges from past strategic missteps. Shell and Total are preferred European options.

The author or authors do not own shares in any securities mentioned in this article.



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