What Happened?

Shares of oil and gas producer ConocoPhillips (NYSE: COP) jumped 4.3% in the afternoon session after oil prices surged following attacks on commercial ships near the Strait of Hormuz. 

Multiple tankers were reportedly struck by projectiles in the critical shipping lane, a key passageway for global oil transport. The incident immediately pushed crude oil prices higher, with the August contract rising to over $72 a barrel. 

This development adds a layer of uncertainty for investors, as sustained higher oil prices can fuel inflation. Simultaneously, a drone attack on Russia's largest refinery signaled a significant expansion in the Ukraine conflict, further pressuring prices upward. 

Higher oil prices typically translate to increased revenues and profitability for oil and gas companies, boosting investor sentiment across the sector.

The shares closed the day at $108.44, up 4.7% from the previous close.

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What Is The Market Telling Us

ConocoPhillips’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 2 months ago when the stock dropped 3.7% on the news that crude oil prices fell sharply as President Trump paused the Strait of Hormuz military escort and cited progress on a U.S.–Iran peace deal. 

Oil and gas company profits move almost directly with the price of oil: when oil falls, revenue per barrel falls, and profit margins compress. The Strait of Hormuz is a critical oil chokepoint: approximately 20% of global oil supply passes through it daily. When the strait is at risk from conflict, oil carries a geopolitical risk premium as extra price built in to reflect supply uncertainty. 

When that risk eases, the premium disappears and prices return toward the underlying supply-and-demand level. OPEC+, the group of major oil-producing countries, separately announced 188,000 barrels per day of additional supply starting June 2026, which added to the downward price pressure independent of the peace deal.

ConocoPhillips is up 11.9% since the beginning of the year, but at $108.25 per share, it is still trading 19.1% below its 52-week high of $133.80 from March 2026. Investors who bought $1,000 worth of ConocoPhillips’s shares 5 years ago would now be looking at an investment worth $1,834.

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