Impact of Strait of Hormuz Closure on Oil Prices
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 25 2026
0mins
Should l Buy DVN?
Source: Fool
- Crude Supply Tightness: The IEA reports that 25% of global seaborne oil flows through the Strait of Hormuz, and the prospect of its closure has driven oil prices up, prompting investors to consider U.S. companies like Devon Energy and Diamondback Energy to mitigate supply risks and secure capital returns.
- LNG Trade Disruption: Approximately 20% of global LNG trade passes through the Strait, and its closure will lead to rising prices worldwide, particularly impacting Europe; investors might look to Norway's Equinor and Australia's Woodside Energy to fill the supply gap in Asia.
- Refining Profit Surge: Refining stocks such as PBF Energy and Valero Energy have seen significant gains in 2026, with the 3-2-1 crack spread soaring from $20 at the start of the year to over $58, indicating that Asian refiners are facing higher crude procurement costs due to product shortages from the Gulf.
- Fertilizer Price Surge: The blockade of the Strait has stranded many fertilizer-laden ships, causing prices to soar and severely impacting Asian and African countries reliant on Gulf fertilizers; investors are turning to U.S. producers like CF Industries to navigate the tightening global fertilizer supply situation.
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Analyst Views on DVN
Wall Street analysts forecast DVN stock price to fall
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 45.780
Low
41.00
Averages
45.53
High
55.00
Current: 45.780
Low
41.00
Averages
45.53
High
55.00
About DVN
Devon Energy Corporation is an oil and gas producer in the United States with a diversified multi-basin portfolio headlined by an acreage position in the Delaware Basin. The Company is primarily engaged in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). It owns a portfolio of assets located in the Delaware Basin, Rockies, Eagle Ford and Anadarko Basin. The Delaware Basin operates in southeast New Mexico and across the state line into west Texas. It offers exploration and development opportunities from many geologic reservoirs and play types, including the oil-rich Wolfcamp, Bone Spring, Avalon and Delaware formations. Its Rockies development consists of its Williston Basin and Powder River Basin assets. The Eagle Ford operations are located in Texas' DeWitt and Karnes counties. The Anadarko Basin development is located in western Oklahoma. It has a joint venture with Dow to develop a portion of its Anadarko Basin acreage.
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.
Devon Energy Shares Rebound, Ending Six-Day Losing Streak
- Share Price Rebound: Devon Energy (DVN) shares rose 1.77% to $46.03, marking an end to a six-day losing streak, indicating a gradual recovery in market confidence regarding its future performance.
- Strong Year-to-Date Performance: Despite a nearly 6% decline between April 8 and April 15, DVN's stock has risen over 25% year-to-date, significantly outperforming the S&P 500's nearly 3% increase, reflecting its robust position in the energy market.
- Divergent Analyst Ratings: Seeking Alpha's quant rating gives DVN a Hold with a score of 3.42, showing an A for profitability but a D for growth, highlighting differing views among analysts regarding its future growth potential.
- Optimistic Merger Outlook: The merger with Coterra Energy is expected to expand Devon's production capacity and strengthen its presence in the natural gas market, with analysts noting significant synergy potential, although some believe the stock is fairly valued and may face volatility ahead.
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Trump's Expectations: Former U.S. President Trump mentioned that U.S.-Iran negotiation representatives may meet this weekend, anticipating a final agreement to end the war.
Timeline for Agreement: Trump expressed confidence that an agreement could be reached within one or two days.
Context of Negotiations: The discussions are part of ongoing efforts to resolve tensions between the U.S. and Iran.
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- Oil Price Plunge: WTI crude prices fell over 11% to a five-week low after Iran announced the Strait of Hormuz is fully open, easing inflation concerns and causing the 10-year T-note yield to drop 7 basis points to 4.24%.
- Strong Earnings Season: The earnings season started robustly, with 81% of the 48 S&P 500 companies reporting Q1 earnings exceeding estimates, projecting a 12% year-over-year increase in earnings, providing strong support for the stock market.
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- Importance of Market Cap: Market capitalization is a crucial data point for investors, with PPL Corp's market cap at $29.59 billion compared to Devon Energy Corp's $28.45 billion, providing a more accurate valuation comparison for investors.
- Investor Misconceptions: Many beginners mistakenly believe that a higher stock price indicates a higher company value, but market cap offers a true basis for comparison, helping investors avoid such misconceptions and make more informed decisions.
- Market Position Impact: Market cap determines a company's size tier among peers, directly influencing which mutual funds and ETFs are willing to hold the stock; for instance, funds focused on large-cap stocks may only consider companies valued at over $10 billion.
- Stock Performance: At Friday's close, PPL was down about 0.8% while DVN fell approximately 3.5%, reflecting differing market reactions to these companies and further emphasizing the significance of market cap in investment decisions.
See More
US Stocks Rally as Oil Prices Plunge Amid Peace Talks
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- Oil Price Plunge: WTI crude oil prices fell over 13% to a five-week low after the Strait of Hormuz reopened, easing inflation concerns and causing the 10-year Treasury yield to drop by 8 basis points, further supporting the bond market.
- Earnings Growth Expectations: Q1 earnings for the S&P 500 are projected to increase by 12% year-over-year, although excluding the tech sector, growth is only 3%, indicating resilience in corporate performance amid economic recovery and providing market support.
- Airline Stocks Soar: With reduced fuel costs, Alaska Air Group and United Airlines surged by over 14% and 11%, respectively, demonstrating the positive impact of falling oil prices on the airline industry, which could enhance profitability for related companies.
See More
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- Market Highs: The S&P 500 rose by 0.87% and the Nasdaq 100 reached an all-time high, reflecting growing investor optimism regarding a potential US-Iran peace deal, which may enhance risk appetite and further boost stock market momentum.
- Oil Price Plunge: WTI crude prices fell over 10% after Iran announced the Strait of Hormuz is now fully open for commercial shipping, easing inflation concerns and contributing to a 6 basis point drop in the 10-year Treasury yield, which invigorates the bond market.
- Earnings Optimism: Q1 earnings for the S&P 500 are projected to increase by 12% year-over-year, although excluding the tech sector, growth is only expected at 3%, yet this overall positive outlook may attract more investor interest and bolster market confidence.
- Airline Stocks Surge: With reduced fuel costs, United Airlines (UAL) shares surged over 10%, while other airlines like Royal Caribbean (RCL) and Alaska Air (ALK) also saw significant gains, indicating strong market confidence in the recovery of the airline industry.
See More
Devon Energy Shares Rebound, Ending Six-Day Losing Streak
- Share Price Rebound: Devon Energy (DVN) shares rose 1.77% to $46.03, marking an end to a six-day losing streak, indicating a gradual recovery in market confidence regarding its future performance.
- Strong Year-to-Date Performance: Despite a nearly 6% decline between April 8 and April 15, DVN's stock has risen over 25% year-to-date, significantly outperforming the S&P 500's nearly 3% increase, reflecting its robust position in the energy market.
- Divergent Analyst Ratings: Seeking Alpha's quant rating gives DVN a Hold with a score of 3.42, showing an A for profitability but a D for growth, highlighting differing views among analysts regarding its future growth potential.
- Optimistic Merger Outlook: The merger with Coterra Energy is expected to expand Devon's production capacity and strengthen its presence in the natural gas market, with analysts noting significant synergy potential, although some believe the stock is fairly valued and may face volatility ahead.
See More
Iran: No Agreement Reached for Next Round of Talks with the United States
Iran's Stance on Talks: Iran has not agreed to hold the next round of talks with the United States, as reported by Tasnim News Agency.
Trump's Expectations: Former U.S. President Trump mentioned that U.S.-Iran negotiation representatives may meet this weekend, anticipating a final agreement to end the war.
Timeline for Agreement: Trump expressed confidence that an agreement could be reached within one or two days.
Context of Negotiations: The discussions are part of ongoing efforts to resolve tensions between the U.S. and Iran.
See More
US Stocks Surge as Oil Prices Plunge Amid Peace Talks
- Market Rally: The S&P 500 rose 1.20% and the Nasdaq 100 increased by 1.29%, reaching all-time highs, reflecting investor optimism regarding US-Iran peace talks, which may enhance risk appetite in the markets.
- Oil Price Plunge: WTI crude prices fell over 11% to a five-week low after Iran announced the Strait of Hormuz is fully open, easing inflation concerns and causing the 10-year T-note yield to drop 7 basis points to 4.24%.
- Strong Earnings Season: The earnings season started robustly, with 81% of the 48 S&P 500 companies reporting Q1 earnings exceeding estimates, projecting a 12% year-over-year increase in earnings, providing strong support for the stock market.
- Airline Stocks Surge: Airline stocks surged as fuel costs decreased, with Alaska Air Group (ALK) rising over 10% and Royal Caribbean Cruises Ltd (RCL) up more than 7%, indicating market confidence in the recovery of the airline industry.
See More
Market Capitalization Comparison: PPL vs. DVN
- Importance of Market Cap: Market capitalization is a crucial data point for investors, with PPL Corp's market cap at $29.59 billion compared to Devon Energy Corp's $28.45 billion, providing a more accurate valuation comparison for investors.
- Investor Misconceptions: Many beginners mistakenly believe that a higher stock price indicates a higher company value, but market cap offers a true basis for comparison, helping investors avoid such misconceptions and make more informed decisions.
- Market Position Impact: Market cap determines a company's size tier among peers, directly influencing which mutual funds and ETFs are willing to hold the stock; for instance, funds focused on large-cap stocks may only consider companies valued at over $10 billion.
- Stock Performance: At Friday's close, PPL was down about 0.8% while DVN fell approximately 3.5%, reflecting differing market reactions to these companies and further emphasizing the significance of market cap in investment decisions.
See More
US Stocks Rally as Oil Prices Plunge Amid Peace Talks
- Market Surge: The S&P 500 rose by 1.28% and the Nasdaq 100 reached an all-time high, reflecting investor optimism driven by peace talks between the US and Iran, which may enhance risk appetite and bolster overall market confidence.
- Oil Price Plunge: WTI crude oil prices fell over 13% to a five-week low after the Strait of Hormuz reopened, easing inflation concerns and causing the 10-year Treasury yield to drop by 8 basis points, further supporting the bond market.
- Earnings Growth Expectations: Q1 earnings for the S&P 500 are projected to increase by 12% year-over-year, although excluding the tech sector, growth is only 3%, indicating resilience in corporate performance amid economic recovery and providing market support.
- Airline Stocks Soar: With reduced fuel costs, Alaska Air Group and United Airlines surged by over 14% and 11%, respectively, demonstrating the positive impact of falling oil prices on the airline industry, which could enhance profitability for related companies.
See More
US Stocks Rise as Oil Prices Plunge
- Market Highs: The S&P 500 rose by 0.87% and the Nasdaq 100 reached an all-time high, reflecting growing investor optimism regarding a potential US-Iran peace deal, which may enhance risk appetite and further boost stock market momentum.
- Oil Price Plunge: WTI crude prices fell over 10% after Iran announced the Strait of Hormuz is now fully open for commercial shipping, easing inflation concerns and contributing to a 6 basis point drop in the 10-year Treasury yield, which invigorates the bond market.
- Earnings Optimism: Q1 earnings for the S&P 500 are projected to increase by 12% year-over-year, although excluding the tech sector, growth is only expected at 3%, yet this overall positive outlook may attract more investor interest and bolster market confidence.
- Airline Stocks Surge: With reduced fuel costs, United Airlines (UAL) shares surged over 10%, while other airlines like Royal Caribbean (RCL) and Alaska Air (ALK) also saw significant gains, indicating strong market confidence in the recovery of the airline industry.
See More
