Oil and gas stocks are experiencing significant movements as escalating tensions between the United States and Iran raise concerns over potential disruptions in the Strait of Hormuz. This key shipping route is vital for oil exports, and military activity in the region has already begun pushing oil prices higher. According to Haris Khurshid, chief investment officer at Karobaar Capital LP, “Markets can tolerate headlines but won’t ignore lost supply.” He emphasized that any credible interference in the Strait of Hormuz could lead to rapid price adjustments in crude oil.
Brent crude futures recently surpassed the $70 per barrel mark, igniting interest in oil and gas refinery stocks. Concerns surrounding the ability of countries such as Saudi Arabia, Iraq, and Kuwait to transport their oil supplies through this crucial passage have heightened amidst fears of military action in Iran, which contributes approximately 3% of global oil production.
Despite earlier predictions of a global oil surplus, Goldman Sachs has revised its forecasts for Brent and West Texas Intermediate (WTI) crude prices, raising them by $6 each for the fourth quarter of 2026. They now project prices to reach $60 per barrel for Brent and $56 for WTI. Additionally, analysts at Barclays have indicated that a disruption of 1 million barrels per day, equating to half of Iran’s crude exports, would increase the fair value of oil by $8.
Beyond geopolitical tensions, reductions in drilling activity by Russian oil producers have also contributed to a more favorable outlook for oil prices. According to Sergey Vakulenko, Russian production trends closely mirror those of U.S. shale, creating fluctuations in output based on drilling activity.
As the situation in the Middle East continues to evolve, investors are keenly focused on the most promising oil and gas refinery stocks. The following analysis highlights eight stocks with strong potential based on current market conditions and hedge fund interests.
Top Oil & Gas Refinery Stocks to Watch
1. **Delek US Holdings Inc (NYSE:DK)**
– **Stock Upside Potential:** 20.63%
– **Number of Hedge Fund Holders:** 33
– Delek plans to distribute a quarterly dividend of $0.255 per share on March 9, 2026. The company’s Q3 results surpassed expectations, revealing an adjusted EPS of $7.13. Notably, Delek benefited from $280.8 million in exemptions granted by the U.S. Environmental Protection Agency.
2. **CVR Energy, Inc. (NYSE:CVI)**
– **Stock Upside Potential:** 17.61%
– **Number of Hedge Fund Holders:** 32
– CVR reported a Q4 loss per share of $0.80, which was higher than the anticipated loss of $0.59. Despite this, revenues reached $1.81 billion, exceeding expectations. The company is optimistic about refining demand due to expected increases in global refined product consumption.
3. **Par Pacific Holdings Inc (NYSE:PARR)**
– **Stock Upside Potential:** 23.66%
– **Number of Hedge Fund Holders:** 39
– Set to report Q4 results on February 24, 2026, analysts predict Par Pacific will experience significant shifts in crude trade flows due to sanctions relief and changes in U.S. involvement in the energy sector.
4. **BP PLC (NYSE:BP)**
– **Stock Upside Potential:** 2.36%
– **Number of Hedge Fund Holders:** 50
– BP recently reported an underlying profit of $1.5 billion for Q4, although it faced a $3.4 billion loss due to impairments. The company is adjusting its capital expenditures to strengthen its balance sheet.
5. **HF Sinclair Corp (NYSE:DINO)**
– **Stock Upside Potential:** 11.01%
– **Number of Hedge Fund Holders:** 53
– HF Sinclair achieved an adjusted EPS of $1.20 in Q4, significantly beating expectations. The company returned $230 million to shareholders through dividends and buybacks, indicating robust financial health.
6. **Phillips 66 (NYSE:PSX)**
– **Stock Upside Potential:** 0.10%
– **Number of Hedge Fund Holders:** 60
– Phillips 66 aims to procure heavy crude directly from Venezuela, potentially enhancing profitability. The company announced a quarterly dividend of $1.27 per share, reflecting confidence in its cash flow generation.
7. **Marathon Petroleum Corporation (NYSE:MPC)**
– **Stock Upside Potential:** 3.06%
– **Number of Hedge Fund Holders:** 63
– Following strong Q4 results, Marathon’s stock was upgraded with BMO Capital raising its price target to $225. The firm highlighted Marathon’s favorable refining position and robust earnings.
8. **Valero Energy Corp (NYSE:VLO)**
– **Stock Upside Potential:** 0.72%
– **Number of Hedge Fund Holders:** 64
– Valero is set to import up to 6.5 million barrels of crude from Venezuela, with its recent earnings report showing a significant increase in EPS and revenue compared to prior year figures.
As the geopolitical landscape continues to shift, these stocks may present lucrative opportunities for investors. With the market responding to both regional tensions and production dynamics, the focus on oil and gas refinery stocks is likely to remain strong in the coming months.
