Analysis of Investment Opportunities in Energy ETFs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 11 2026
0mins
Source: NASDAQ.COM
- Strong ETF Performance: The State Street Energy Select Sector SPDR ETF has surged over 20% year-to-date, reflecting strong investor interest in energy stocks following the Middle East crisis, indicating a growing confidence in the energy sector.
- Key Holdings Analysis: The ETF's top three holdings, ExxonMobil, Chevron, and ConocoPhillips, account for 48% of total assets, positioning these major players to provide stability in earnings during potential oil price declines.
- Attractive Valuation: Despite the recent rise in oil prices, the ETF's price-to-earnings ratio stands at only 20x, significantly lower than the S&P 500's 29x, highlighting its relative undervaluation and appealing to value-seeking investors.
- Stable Income: With a distribution yield of 2.6%, the ETF offers investors a reliable income source amidst fluctuations in oil and gas prices, enhancing its appeal as a defensive investment option.
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Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 160.780
Low
114.00
Averages
132.17
High
158.00
Current: 160.780
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Supply Chain Assurance: Italy will start receiving liquefied natural gas from the Golden Pass LNG joint venture between QatarEnergy and Exxon Mobil in June, helping to fill a supply gap caused by disruptions from the Middle East war, ensuring energy supply stability.
- First Delivery: This delivery will mark the first cargo from Golden Pass facilities to Italy's Adriatic LNG terminal, further advancing Italy's energy diversification strategy and reducing reliance on a single source of supply.
- Capacity Recovery: QatarEnergy's CEO stated that Iranian attacks have knocked out 17% of Qatar's LNG export capacity, thus the commissioning of Golden Pass LNG will help restore market supply and alleviate price pressures.
- Long-term Capacity: Once fully operational, the Golden Pass LNG facility will have an annual production capacity of 18 million metric tons, expected to provide a stable supply of liquefied natural gas to Italy and other European markets, enhancing regional energy security.
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- Rising Flight Prices: Since the onset of the Iran conflict, jet charter prices have surged by an average of 5% to 15%, with some flights experiencing increases of up to 20%, leading affluent travelers to face unexpected fees, although they are generally less sensitive to price fluctuations.
- Steady Market Demand: Despite soaring fuel prices, the private flying market remains robust, with WingX reporting a 5% year-over-year increase in flights for the week ending March 22, and Flexjet noting a 15% rise in utilization among fractional owners, indicating sustained demand from high-net-worth clients.
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- Brent Crude Spot Price: The spot price for Brent crude soared to $141.36 on Thursday, the highest level since the 2008 financial crisis, reflecting market sensitivity to geopolitical risks and concerns over future supply.
- Asia-Pacific Market Reaction: While the Australian and Hong Kong markets were closed for the Easter holiday, Japan's Nikkei 225 futures rose to 53,285 in Chicago, demonstrating investor optimism about market prospects.
- U.S. Market Volatility: U.S. major indexes experienced volatility amid rising oil prices, with the Dow Jones Industrial Average declining by 61.07 points, yet the S&P 500 managed a slight increase of 0.11%, showcasing the market's adaptability to oil price fluctuations.
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Chevron's Outlook for the Next Three Years
- Dividend Stability: Chevron has raised its dividend for 39 consecutive years, currently offering a forward yield of 3.6%, demonstrating reliability as a blue-chip stock amidst oil price fluctuations, which attracts long-term investors.
- Production Growth Expectations: From 2025 to 2028, Chevron's revenue and EPS are expected to grow at CAGRs of 2% and 16%, respectively, primarily driven by the expansion of the Tengiz Field in Kazakhstan, aiming for a production of 1 million barrels per day.
- Cost Control Measures: To stabilize its margins, Chevron plans to cut structural costs by $3 billion to $4 billion by the end of 2026, enhancing its resilience against oil price volatility and ensuring continued shareholder returns.
- Market Valuation Analysis: With a current stock price of $200, Chevron's P/E ratio stands at 24 times; if it meets analysts' estimates over the next three years, its stock price could rise by 50% to $300, showcasing strong profit potential during oil price increases.
See More
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- Profit Growth Expectations: With rising oil prices, Chevron anticipates its revenue and EPS to grow at CAGRs of 2% and 16% from 2025 to 2028, primarily driven by the expansion of the Tengiz Field in Kazakhstan, which aims to produce about 1 million barrels per day, thereby enhancing the company's profitability and cash flow.
- Dividend Stability: Chevron has raised its dividend for 39 consecutive years, currently offering a forward yield of 3.6%, which not only reflects the company's strong cash flow management but also boosts investor confidence in its long-term investment value, especially amid oil price volatility.
- Cost Control Measures: To stabilize margins, Chevron plans to cut structural costs by $3 billion to $4 billion by the end of 2026, a move that will help enhance its profitability in a competitive energy market and provide funding for future investments.
- Strong Market Performance: Chevron's stock has rallied over 30% year-to-date, with a current P/E ratio of 24; if its EPS grows by 15% in 2029, the stock price could rise by 50% to $300 over the next three years, indicating strong market confidence and investment potential.
See More
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- Oil Price Surge: WTI crude oil prices jumped over 10% to exceed $110 per barrel, while Brent crude rose 6% to over $107, reflecting strong market reactions to geopolitical tensions.
- Strait of Hormuz Closure Risk: Military strikes by Israel and the U.S. against Iran have led to retaliatory attacks on the global energy market, effectively closing the Strait of Hormuz, which previously accounted for 20% of the world's oil and LNG exports, posing risks to the global economy.
- Changing Market Expectations: Initially, the market expected the conflict with Iran to be short-lived, but it now appears the Strait of Hormuz could remain closed for an extended period, leading to sustained high oil prices and delays in restarting production once shipping resumes.
- Investment Opportunities in Energy: Despite soaring oil prices, shares of Chevron and ExxonMobil have only risen about 30%, indicating significant profit potential in a high oil price environment, prompting investors to consider increasing their positions to capitalize on untapped upside.
See More
Italy to Receive LNG from Golden Pass Venture Starting June
- Supply Chain Assurance: Italy will start receiving liquefied natural gas from the Golden Pass LNG joint venture between QatarEnergy and Exxon Mobil in June, helping to fill a supply gap caused by disruptions from the Middle East war, ensuring energy supply stability.
- First Delivery: This delivery will mark the first cargo from Golden Pass facilities to Italy's Adriatic LNG terminal, further advancing Italy's energy diversification strategy and reducing reliance on a single source of supply.
- Capacity Recovery: QatarEnergy's CEO stated that Iranian attacks have knocked out 17% of Qatar's LNG export capacity, thus the commissioning of Golden Pass LNG will help restore market supply and alleviate price pressures.
- Long-term Capacity: Once fully operational, the Golden Pass LNG facility will have an annual production capacity of 18 million metric tons, expected to provide a stable supply of liquefied natural gas to Italy and other European markets, enhancing regional energy security.
See More
Private Jet Travel Faces Challenges Amid Soaring Fuel Prices
- Fuel Price Surge Impact: The Iran war has driven jet fuel prices to an average of $4.65 per gallon globally, significantly increasing private flight costs, with Vimana recently booking a $520,000 flight from Dubai to London, up from $400,000 in 2023, reflecting a 30% increase.
- Rising Flight Prices: Since the onset of the Iran conflict, jet charter prices have surged by an average of 5% to 15%, with some flights experiencing increases of up to 20%, leading affluent travelers to face unexpected fees, although they are generally less sensitive to price fluctuations.
- Steady Market Demand: Despite soaring fuel prices, the private flying market remains robust, with WingX reporting a 5% year-over-year increase in flights for the week ending March 22, and Flexjet noting a 15% rise in utilization among fractional owners, indicating sustained demand from high-net-worth clients.
- Airlines' Response Strategies: Some operators are mitigating costs by refueling in countries with cheaper fuel, even if it results in longer flight times; however, clients continue to prefer private flights to avoid long airport lines, especially during disruptions caused by government shutdowns.
See More
Iran and Oman Protocol Raises Market Hopes for Strait of Hormuz
- Oil Price Surge: Oil prices surged significantly as Iran and Oman drafted a protocol for monitoring the Strait of Hormuz, with U.S. crude futures jumping nearly 12% to $112.06 per barrel, indicating market optimism about potential supply recovery.
- Brent Crude Spot Price: The spot price for Brent crude soared to $141.36 on Thursday, the highest level since the 2008 financial crisis, reflecting market sensitivity to geopolitical risks and concerns over future supply.
- Asia-Pacific Market Reaction: While the Australian and Hong Kong markets were closed for the Easter holiday, Japan's Nikkei 225 futures rose to 53,285 in Chicago, demonstrating investor optimism about market prospects.
- U.S. Market Volatility: U.S. major indexes experienced volatility amid rising oil prices, with the Dow Jones Industrial Average declining by 61.07 points, yet the S&P 500 managed a slight increase of 0.11%, showcasing the market's adaptability to oil price fluctuations.
See More
Chevron's Outlook for the Next Three Years
- Dividend Stability: Chevron has raised its dividend for 39 consecutive years, currently offering a forward yield of 3.6%, demonstrating reliability as a blue-chip stock amidst oil price fluctuations, which attracts long-term investors.
- Production Growth Expectations: From 2025 to 2028, Chevron's revenue and EPS are expected to grow at CAGRs of 2% and 16%, respectively, primarily driven by the expansion of the Tengiz Field in Kazakhstan, aiming for a production of 1 million barrels per day.
- Cost Control Measures: To stabilize its margins, Chevron plans to cut structural costs by $3 billion to $4 billion by the end of 2026, enhancing its resilience against oil price volatility and ensuring continued shareholder returns.
- Market Valuation Analysis: With a current stock price of $200, Chevron's P/E ratio stands at 24 times; if it meets analysts' estimates over the next three years, its stock price could rise by 50% to $300, showcasing strong profit potential during oil price increases.
See More
Chevron's Core Growth Engines Fully Operational
- Profit Growth Expectations: With rising oil prices, Chevron anticipates its revenue and EPS to grow at CAGRs of 2% and 16% from 2025 to 2028, primarily driven by the expansion of the Tengiz Field in Kazakhstan, which aims to produce about 1 million barrels per day, thereby enhancing the company's profitability and cash flow.
- Dividend Stability: Chevron has raised its dividend for 39 consecutive years, currently offering a forward yield of 3.6%, which not only reflects the company's strong cash flow management but also boosts investor confidence in its long-term investment value, especially amid oil price volatility.
- Cost Control Measures: To stabilize margins, Chevron plans to cut structural costs by $3 billion to $4 billion by the end of 2026, a move that will help enhance its profitability in a competitive energy market and provide funding for future investments.
- Strong Market Performance: Chevron's stock has rallied over 30% year-to-date, with a current P/E ratio of 24; if its EPS grows by 15% in 2029, the stock price could rise by 50% to $300 over the next three years, indicating strong market confidence and investment potential.
See More
Oil Prices Surge Over 10% Amid Geopolitical Tensions
- Oil Price Surge: WTI crude oil prices jumped over 10% to exceed $110 per barrel, while Brent crude rose 6% to over $107, reflecting strong market reactions to geopolitical tensions.
- Strait of Hormuz Closure Risk: Military strikes by Israel and the U.S. against Iran have led to retaliatory attacks on the global energy market, effectively closing the Strait of Hormuz, which previously accounted for 20% of the world's oil and LNG exports, posing risks to the global economy.
- Changing Market Expectations: Initially, the market expected the conflict with Iran to be short-lived, but it now appears the Strait of Hormuz could remain closed for an extended period, leading to sustained high oil prices and delays in restarting production once shipping resumes.
- Investment Opportunities in Energy: Despite soaring oil prices, shares of Chevron and ExxonMobil have only risen about 30%, indicating significant profit potential in a high oil price environment, prompting investors to consider increasing their positions to capitalize on untapped upside.
See More
