Big Oil’s Moment Is Here—And the Market Might Not Be Fully Pricing the Shift
Big Oil’s Moment Is Here—And the Market Might Not Be Fully Pricing the Shift
Joey FrenetteMon, March 23, 2026 at 8:04 PM UTC
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24/7 Wall St. (24/7 Wall St. )Quick Read -
The Stocks: XLE (State Street Energy Select Sector SPDR ETF) holds major oil producers including Exxon Mobil (XOM) and Chevron (CVX), which together comprise over 40% of the ETF and stand to benefit from triple-digit oil pricing with potential dividend growth ahead.
An Iran-related oil shock has driven crude toward $100/barrel, making energy plays attractive again as investors search for defensive positions amid broad market weakness, though the sustainability of elevated oil prices remains uncertain.
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The Iran war has caused an oil shock that's adding more pressure to the broad markets. With the Nasdaq Composite already in a correction, and the S&P 500 down just a hair under 7%, it feels like a good time to get out before things have a chance to get even worse. Of course, with President Trump reportedly considering a "winding down" of military efforts, things could easily go in either direction.
Though things are bound to be unpredictable, even scary, over the coming sessions, I do think that not letting yourself get rattled is key to making it through a turbulent market that many of us may have been ill-prepared for going into the new year. In any case, big oil is having its moment, and many scrambling investors might be wondering if there are any pockets of value left in an energy trade that hasn't been this hot in a number of years.
The oil spike is a shocker that's made big energy interesting again
With oil prices in the $100 ballpark, many top "big oil" producers may have yet to fully price in the return of triple-digit oil. With talks about even higher prices ($200 could be an even worse shocker), perhaps the big energy names aren't quite overbought just yet.
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Either way, I wouldn't dare bet on oil's next move. Rather, I'd look to structural tailwinds (think the rise of AI and the demand for natural gas) as top factors to look for as the next phase of the oil spike plays out. Of course, there's also the risk of even higher oil prices, which could make energy plays one of the few pillars of strength in a market where nearly everything is headed lower in a hurry.
While the Fed doesn't have stagflation on its radar quite yet, I'm sure many investors are wondering if it's due for a return. While I wouldn't panic-buy big oil with the expectation of such, I would consider gradual buying of the large-cap energy plays that might have significant dividend increases in store for investors if triple-digit oil is here to stay for a while longer.
Is $100+ oil here to stay? Or not?
So, is oil's surge a temporary spike that we'll forget about in a few weeks? Or is this the start of a structural move that brings forth a whole slate of risks many might not be ready for? You be the judge. There are smart pundits in both camps right now. Either way, higher oil prices will turn Big Oil into absolute cash cows. Even if a plunge is in the cards, the AI tailwind is still in the background, and that alone might make energy a vital sector to stay invested in.
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Personally, I have no idea if the oil bears (temporary spike camp) are right or if the bulls ($100+ oil here to stay?) will be proven right. But it's only prudent to be ready for either scenario as the so-called Hormuz premium sticks around as the Strait stays closed.
At this juncture, the State Street Energy Select Sector SPDR ETF (NYSEARCA:XLE) seems like a go-to way to bet on producers if you're in the latter camp that thinks $100 oil might be just the start. Are you paying a big Hormuz premium here? Most definitely. But if the situation in the Middle East takes a turn for the worse, perhaps the market hasn't yet gotten that premium in the right spot. Maybe it's even higher than current levels? Time will tell.
Big bets on Big Oil
In any case, the State Street Energy Select Sector SPDR ETF owns all the Big Oil names that investors know and love. Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) are the top two that comprise more than 40% of the sector ETF. With a relatively small 2.62% yield, but upbeat dividend growth prospects and good upside momentum, the State Street Energy Select Sector SPDR ETF might be the way to go, even after a vicious three-month rally.
Personally, I'm not jumping into this energy ETF right here, as I'm fine with my exposure. But if you're not, the State Street Energy Select Sector SPDR ETF is a quick way to fix that. Just be ready for steep ups and downs as oil fluctuates between $80-110 in the coming sessions.
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