You haven't missed all the gains to come in oil stocks in the aftermath of Operation Epic Fury, which is likely to weigh on oil markets for months, if not years.

"Opining on the short-term pathway of the Gulf crisis is next to impossible," Citi analyst Alastair Syme wrote in a new note on Thursday. "We hear the argument that the market risks being too complacent but, equally, history in this sector says be careful about capitalizing commodity-price spikes."

"More interesting to us are the more lasting consequences which we believe will be the structural re-engagement of the broader investment community with oil & gas equities," Syme added.

Since the onset of the war in the Middle East, global oil prices have spiked and become significantly more volatile, driven by fears of supply disruptions across key energy corridors in the region.

Brent crude has surged from the mid-$70s per barrel range before the war to well above $100, as traders price in the risk of constrained flows through critical chokepoints like the Strait of Hormuz, along with potential production outages in nearby exporting countries.

Prices surged more than 7% to $109 a barrel on Thursday as President Trump failed to clearly lay out his endgame to the war and the Strait of Hormuz during a televised speech late Wednesday.

The rally has been amplified by precautionary shipping reroutes, higher insurance costs for tankers, and a tightening of supply as refiners and governments build inventories.

At the same time, speculative positioning has increased, adding further upward pressure.

In short, the price spike reflects not only actual supply disruptions but a broader risk premium tied to geopolitical uncertainty and the possibility of a prolonged conflict impacting global energy markets.

The gloomy backdrop has been fertile ground for investors in oil stocks.

Oil major BP's (BP) stock has skyrocketed 19% over the past month, while Exxon Mobil (XOM) and Chevron (CVX) are each up about 5.5%. The S&P 500 (^GSPC) is down roughly 4.5% in the last month.

Citi's Syme offers a reminder on the history of shocks in the industry, and how they can be quite bullish for investors.

He pointed out that the global energy system has seen four notable supply-side shocks in the past 50 years:

Iran-Iraq war, 1980-82: Attacks on oil facilities and shipping led to a combined oil production across the two countries dropping by about 4.5 million barrels per day, equivalent to 3.5% of the total global energy supply.

Fukushima nuclear accident, 2011: The subsequent shutdown of Japan’s entire nuclear fleet equated to 0.5% of the world’s total energy supply.

Russian invasion of Ukraine, 2022: the subsequent shutdown of Russian gas supplies to Europe equated to 0.7% of the world’s total energy supply.

The current Gulf crisis, 2026: as it stands today, Citi estimates that production shut-ins and shipping constraints are constraining global energy supply by 4%. An extended crisis will clearly have a major impact on energy prices and GDP.

"If investors do re-engage, are they doing so in a sector that is already expensive? We don’t think so," Syme explained. "A good point of reference is that Energy’s weight in global equity markets is today at 4.8%. This is well below the 8.6% average of the last 50 years highlighting the progressive structural shift in markets away from ‘old economy’ sectors."

The analyst's top pick is BP, and the stock appears to be out of favor with the broader market, according to Yahoo Finance data.

Syme said, "BP is the only one of the [international oil company] names that still prices negative terminal growth, a value construct that we believe can be bettered. We see scope for the new CEO to reposition BP around its core strengths and, while the growth characteristics of BP to 2030 are indeed low, the Bumerangue discovery in Brazil provides a transformational opportunity in the early 2030s."

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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