With the US on the offensive, energy stocks have shot to the top of the S&P 500 this year. What comes next?

After three straight years of dismal performance, energy stocks have emerged as the biggest market winners so far in 2026, posting the biggest gains of the 11 sectors that constitute the S&P 500.

This group of large-cap oil and gas producers, refiners, fuel retailers, and field services companies has jumped more than 20% since American special forces captured and extradited Venezuelan President Nicolás Maduro and launched a clampdown on sanctioned oil vessels seeking to transport Venezuelan crude.

Energy stocks coasted to the top of the stock market charts thanks to new Iran-related risks, but the gains came before the rockets, drones, and F-35s actually started flying.

But going forward, further surges seem far from guaranteed. That’s partly because in a war, the enemy gets a vote.

Iran has responded with strikes on energy infrastructure throughout the region and the partial closure of the Strait of Hormuz — a crucial shipping choke point through which 20% of global oil and gas passes. The longer the partial closure lasts, experts say, the worse it will be for the world economy, and that includes oil and gas companies.

On Monday, Iran hit Saudi Arabia’s largest refinery, Ras Tanura, temporarily halting production.

Qatar Energy halted production of liquefied natural gas at its Ras Laffan facility — the world’s largest LNG plant — after an attack.

Iranian strikes have also reached a refinery in Kuwait, shuttered production in Iraqi Kurdistan, and closed down several Israeli gas fields, according to Reuters.

The disruptions help explain the evolving reaction of markets to the situation. After rising on Monday, US energy stocks had a mixed reaction to the spreading war on Tuesday.

The Takeaway

Commodities analysts are carefully watching whether any element of Iranian leadership emerges as a potential partner to work with the US, essentially reprising the role of Venezuela’s Delcy Rodríguez, who has been a relatively pliant acting president since the American military captured and transported her predecessor, Maduro, to face trial in the US. That sort of scenario is harder to imagine in Iran. Regime antipathy to the US has been central to the Iranian government since the founding of the Islamic Republic in the late 1970s. But it’s not impossible. I’m