Hormuz Closure Resets The Math For These 14 Oil Stocks, Analyst Says

The disruption in the Strait of Hormuz is forcing Wall Street to rethink the entire energy sector outlook for 2026.

Last week, Bank of America’s commodity analyst Francisco Blanch lifted his Brent forecast from $61 to $77.50.

This week, the equity desk followed — repricing the economics of the entire U.S. oil and gas sector.

In a note shared Monday, the bank’s equity analyst Kalei Akamine raised price targets on 14 oil-levered exploration and production companies by an average of 17%.

The Oil’s Bear Case Just Lost Its Foundation

For most of last year, the bearish thesis on oil was clean.

OPEC wanted to unwind production cuts. Supply was growing. Inventories were building. The path to $60 oil looked well-paved.

The Strait of Hormuz closure ended that thesis in days. Nearly 20 million barrels of oil and refined products transit the Strait every day.

According to analysts at Bank of America, the market is now pricing a structurally tighter oil balance after shipments through the Strait abruptly stopped nearly two weeks ago.

“Nearly 200 million bbls of crude have already been choked off from the global market, wiping away 50% of the 400 million bbl build that occurred last year,” Akamine said.

The inventory build was the bedrock of the bear case. With it gone, Bank of America raised its oil price forecasts.

The bank’s new $77.50 Brent forecast for 2026 blends two equally weighted paths: a quick resolution normalizing oil flows around $70 by April, and a prolonged conflict pushing Brent toward $85 through the second quarter.

A third scenario — considered unlikely — puts Brent at $130 if the war extends into the second half of the year.

Which Oil Stocks Benefit Most?

With stronger oil assumptions, Bank of America raised price targets across its oil-levered exploration and production (E&P) coverage by an average of 17%.

Among large-cap producers, the bank favors Diamondback Energy (NASDAQ:FANG) as top pick, raising its price target from $180 to $202.

Analysts highlighted strong well performance in the Barnett formation. Some wells delivered 12-month cumulative output of 24 barrels per foot, versus about 16 barrels per foot for peers.

Devon Energy Corp. (NYSE:DVN) and Ovintiv Inc. (NYSE:OVV) are seen as the firm's top pick among mid-cap oil producers.

Devon's target was raised to $53, supported by a large inventory of low-breakeven drilling locations in the Delaware Basin.

Ovintiv's target increased to $63, with analysts citing improved asset quality and strong free-cash-flow potential.

The firm also reiterated bullish views on California Resources Corp. (NYSE:CRC), raising its target to $76 after the company issued stronger-than-expected 2026 guidance.

Despite the near-term supply disruption, the bank cautioned that oil markets could return to surplus conditions once geopolitical tensions ease.

Still, on a WTI basis, the bank estimates the E&P stock group is currently discounting a long-term price range of $60–$70 per barrel.

14 Oil & Gas Stocks Just Received A Price Target Boost From BofA

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