Oil Sector
Note: This is a daily stock update and the information stands true as of 31/08/26, 09:00 CET
Brent is at $90.6/b, up 3% versus Friday, moving back above $90/b for the first time in nearly two weeks. For now, this mainly reflects a return of the geopolitical risk premium, following the recent normalization phase. The US destroyed two Iranian launchers that, according to Washington, were preparing to deploy mines in the Strait of Hormuz. Iran retaliated against two US bases in Jordan, with eight missiles intercepted.
The military escalation is therefore real, but there is still no confirmed additional loss of production. Donald Trump also claims that Kharg has been attacked. The island accounted for around 90% of Iranian exports before the war, but Reuters notes that no independent source has confirmed the attack so far. More importantly, the immediate impact needs to be put into perspective. Iranian exports had already fallen to around 300-400 kb/d last month, from close to 1.5 Mb/d previously. A complete disruption would therefore remove relatively few additional barrels from the market in the short term. However, this renewed escalation reinforces our view that the conflict is likely to last, with the Trump administration now having relatively few obvious exit options.
In Hormuz, only five visible commodity vessels per day crossed the Strait over the weekend. Recent oil flows are still estimated at around 6-8 Mb/d versus 15.8 Mb/d before the war, implying volumes remain 50-60% lower.
We nevertheless highlight that vessels operating without AIS signals make this count incomplete. On equities, we expect a positive reaction from the upstream names. Equinor, Aker BP and Galp offer the most direct exposure to Brent without dependence on Gulf flows. The integrated majors should also benefit from the move. Shell (3,344 GBX) and TotalEnergies (€74.84) benefit from higher crude prices, although their exposure to Qatari LNG and freight slightly reduces the upside leverage.
We nevertheless consider current valuations too high to offer an attractive entry point.
Finally, we still see the most attractive valuation upside in oil services. Technip Energies and Técnicas Reunidas remain well positioned over the long term for investment in gas/LNG infrastructure and offshore projects. We remain positive on both names over the long term.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
The military escalation is therefore real, but there is still no confirmed additional loss of production. Donald Trump also claims that Kharg has been attacked. The island accounted for around 90% of Iranian exports before the war, but Reuters notes that no independent source has confirmed the attack so far. More importantly, the immediate impact needs to be put into perspective. Iranian exports had already fallen to around 300-400 kb/d last month, from close to 1.5 Mb/d previously. A complete disruption would therefore remove relatively few additional barrels from the market in the short term. However, this renewed escalation reinforces our view that the conflict is likely to last, with the Trump administration now having relatively few obvious exit options.
In Hormuz, only five visible commodity vessels per day crossed the Strait over the weekend. Recent oil flows are still estimated at around 6-8 Mb/d versus 15.8 Mb/d before the war, implying volumes remain 50-60% lower.
We nevertheless highlight that vessels operating without AIS signals make this count incomplete. On equities, we expect a positive reaction from the upstream names. Equinor, Aker BP and Galp offer the most direct exposure to Brent without dependence on Gulf flows. The integrated majors should also benefit from the move. Shell (3,344 GBX) and TotalEnergies (€74.84) benefit from higher crude prices, although their exposure to Qatari LNG and freight slightly reduces the upside leverage.
We nevertheless consider current valuations too high to offer an attractive entry point.
Finally, we still see the most attractive valuation upside in oil services. Technip Energies and Técnicas Reunidas remain well positioned over the long term for investment in gas/LNG infrastructure and offshore projects. We remain positive on both names over the long term.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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