Middle East War Fuels Oil Price Surge, Hits Renewables Stocks

The ongoing war in the Middle East has created unprecedented turmoil in oil markets, causing shares of European energy companies to skyrocket. The Stoxx 600 energy sector index has climbed 6% since the conflict began.

Repsol SA is a top pick among analysts at Berenberg, with the Spanish oil and gas firm poised to benefit from prices that could remain high beyond the end of the conflict due to refinery damage. The company has no production operations in the Middle East.

Other companies, such as TotalEnergies SE, have significant operations in the region and are trading only slightly above the broader index. However, European gas storage is roughly 30% full, increasing the need for LNG imports ahead of next winter.