Strait of Hormuz Conflict Sends Oil Stocks into Focus

The escalating conflict around the Strait of Hormuz has put oil supply risk back in focus, prompting investors to reevaluate their exposure to energy stocks. Three integrated oil and gas producers, NewMed Energy Limited Partnership (TASE:NWMD), Antero Midstream (AM), and Hess Midstream (HESM), are particularly affected by this development.

NewMed Energy's pure upstream exposure in the Eastern Mediterranean region makes it a key player in the global energy market. The company generates around $848 million from oil and gas exploration and production, with its Brent-linked contracts providing a hedge against price volatility.

However, NewMed Energy's high leverage and governance questions may offset its growth potential. Antero Midstream, on the other hand, offers midstream-focused services supporting upstream producers in the United States. While it has a strong dividend yield of around 4%, its heavy reliance on Antero Resources and concentration in a single region make it vulnerable to market fluctuations.

Hess Midstream provides essential Bakken infrastructure through fee-based contracts, which can provide steadier cash flows during periods of price volatility. Nevertheless, its high-yield model and Bakken concentration raise questions about sustainability and growth capacity.