- Exxon Mobil Weighs Venezuela Reentry Against Valuation And Dividend Concerns
May 11, 2026
Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE.
Major US and European oil companies, including Exxon Mobil, are moving to re enter Venezuela following a regime change and a shift in US policy. A new hydrocarbon law in Venezuela is offering more favorable terms for international investment in the country’s oil sector. Exxon Mobil is assessing potential projects after previously exiting the country when its assets were nationalized.
For investors watching Exxon Mobil (NYSE:XOM), the renewed access to Venezuela comes as the stock trades around $149.68, with returns of 22.0% year to date and 41.8% over the past year. Over 3 and 5 years, the stock has delivered gains of 56.4% and 187.3%, respectively, which helps explain why any shift in its global resource footprint can draw close attention.
If Exxon Mobil proceeds with new Venezuelan ventures, it would be weighing one of the world’s largest oil reserves against a complex political and legal backdrop. The new hydrocarbon law, ownership terms, and potential capital commitments could influence how the company prioritizes future projects. This is worth monitoring if you hold or track NYSE:XOM.
Stay updated on the most important news stories for Exxon Mobil by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Exxon Mobil.NYSE:XOM 1-Year Stock Price Chart
See which insiders are buying and buying and selling Exxon Mobil following this latest news.
Quick Assessment
⚖️ Price vs Analyst Target: At US$149.68, Exxon Mobil trades about 9.7% below the US$165.68 analyst target, which is within a reasonable range of consensus expectations. ✅ Simply Wall St Valuation: Simply Wall St estimates the stock is trading about 49.1% below its fair value, which flags potential valuation upside if assumptions hold. ❌ Recent Momentum: The share price is down 1.9% over the past 30 days, so short term sentiment has cooled.
There is only one way to know the right time to buy, sell or hold Exxon Mobil: Head to Simply Wall St's company report for the latest analysis of Exxon Mobil's Fair Value.
Key Considerations
📊 Re entry into Venezuela opens access to large reserves that could influence long term production plans if projects progress as expected. 📊 Watch any disclosed capital expenditure for Venezuelan assets, updates on contract terms under the new hydrocarbon law, and how this fits with the current 24.5x P/E versus the industry average of 14.2x. ⚠️ A flagged risk is that the 2.75% dividend is not well covered by free cash flows. Additional political or operational setbacks in Venezuela could add pressure if cash generation weakens.
Story Continues
Dig Deeper
For the full picture, including more risks and rewards, check out the complete Exxon Mobil analysis. Alternatively, you can visit the community page for Exxon Mobil to see how other investors believe this latest news will impact the company's narrative.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include XOM.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
View Comments
- Kinder Morgan jumps 3% after six straight sessions of losses
May 11, 2026
[Crude oil storage tanks at the Kinder Morgan terminal in Abbotsford British Columbia]
todamo
Kinder Morgan (KMI [https://seekingalpha.com/symbol/KMI]) was on track to snap six straight sessions of losses on Monday as its shares rose 2.29% to trade at $32.13, in tandem with rising oil prices.
Oil stocks, including Exxon Mobil (XOM [https://seekingalpha.com/symbol/XOM]), Chevron (CVX [https://seekingalpha.com/symbol/CVX]), ConocoPhillips (COP [https://seekingalpha.com/symbol/COP]), and SLB (SLB [https://seekingalpha.com/symbol/SLB]), also gained after U.S. President Donald Trump said the ceasefire with Iran was "on life support." Their prices were up around 2% to 3% each during afternoon trading.
Speaking from the Oval Office, Trump dismissed Iran’s response to last week’s U.S. proposal as “garbage,” saying he “didn’t even finish reading it.” Reports suggest Tehran sought sanctions relief and an end to Washington’s naval blockade while aiming to retain some influence over traffic through the Strait of Hormuz.
Prior to Monday’s gains, Kinder Morgan shares had been falling since May 1. It lost more than 3% in between May 1 and May 8. On a YTD basis, however, shares of the oil company have risen 16% in stark comparison to a nearly 8% rise in the wider S&P 500 index.
Looking at Seeking Alpha’s quant rating, KMI has been rated a Hold with a score of 3.30 out of 5. It has been rated an A- for its profitability but a D for its valuation and growth. Seeking Alpha analysts, on the other hand, were bullish on the stock and recommended to Buy it. Wall Street analysts mirrored a similar sentiment with a Buy call.
Seeking Alpha analyst The Asian Investor [https://seekingalpha.com/article/4894317-kinder-morgan-a-top-income-pick-for-2026] rated the stock as a Strong Buy following its strong Q1 earnings, driven by robust natural gas demand.
The analyst expects KMI to remain a top pick for income investors, with dividend safety and upside tied to natural gas demand and U.S. data center expansion.
“…growing natural gas demand, in part driven by a growing U.S.-based data center footprint, translates into attractive earnings prospects for investors seeking recurring dividend income from an investment-grade-rated midstream platform that is tilted towards natural gas deliveries,” the analyst wrote about Kinder Morgan.
MORE ON KINDER MORGAN
* Kinder Morgan, Inc. (KMI) Presents at Barclays 18th Annual Americas Select Conference Transcript [https://seekingalpha.com/article/4898327-kinder-morgan-inc-kmi-presents-at-barclays-18th-annual-americas-select-conference-transcript]
* Kinder Morgan: A Top Income Pick For 2026 [https://seekingalpha.com/article/4894317-kinder-morgan-a-top-income-pick-for-2026]
* Kinder Morgan: Thank Storm Fern And All Of The Cold Weather After That [https://seekingalpha.com/article/4893772-kinder-morgan-thank-storm-fern-and-all-of-the-cold-weather-after-that]
* Earnings Scoreboard: 82% of S&P 500 early reporters top EPS estimates ahead of big tech wave [https://seekingalpha.com/news/4579185-earnings-scoreboard-82-of-sp-500-early-reporters-top-eps-estimates-ahead-of-big-tech-wave]
* Kinder Morgan tops Q1 estimates as gas demand surge offsets lower fuel volumes [https://seekingalpha.com/news/4578374-kinder-morgan-tops-q1-estimates-as-gas-demand-surge-offsets-lower-fuel-volumes]
- Shell Post Q1 Earnings: Is the Stock Worth Betting on Now?
May 11, 2026
Shell plc SHEL just posted a big quarterly beat, delivering adjusted earnings of $6.9 billion in the first quarter of 2026, boosted by gains linked to the Middle East war that drove up energy prices and strong operations.
Last Thursday’s quarterly report showed higher contributions from trading and optimization, which reinforce the company’s standing as one of the strongest names in Big Oil. With shares beating both ExxonMobil XOM and Chevron Corporation CVX, and valuation sitting at a discount, the bigger question is whether this momentum can translate into meaningful upside for investors.
SHEL’s Integrated Business Drives Resilient Earnings
Shell’s diversified integrated energy model continues to demonstrate strong resilience, even during periods of heightened market volatility. In the first quarter of 2026, the company delivered adjusted earnings of $6.9 billion, supported by strong operational execution across upstream, refining and marketing businesses. It benefited from higher refining margins, robust trading and optimization contributions, strong lubricant demand, and solid upstream pricing. Importantly, Shell’s global trading platform once again proved to be a competitive advantage, helping the company capitalize on market dislocations caused by geopolitical uncertainty and supply disruptions.
The strength of this model is especially valuable in volatile commodity environments because weakness in one segment is often offset by strength in another. Management also highlighted operational excellence, including record production in Brazil and improved LNG Canada volumes. This operational consistency enhances earnings visibility and cash generation capability, making the stock attractive for investors.Shell plc
Image Source: Shell plc
Shareholder-Friendly Capital Allocation Adds Strength
Shell continues to reinforce its shareholder-friendly capital allocation strategy through consistent dividends and share repurchases. In the first quarter of 2026, the company launched a new $3 billion buyback program and increased its quarterly dividend by 5% to 39.06 cents per share, contributing to total shareholder distributions of $5.3 billion. Despite commodity-driven working capital pressures, Shell maintained a manageable balance sheet and reaffirmed its commitment to returning 40%-50% of operating cash flow to its shareholders. Management’s decision to raise the dividend amid geopolitical uncertainty reflects confidence in the company’s resilient cash-generating ability. Combined with disciplined spending, lower operating costs and improved capital efficiency, Shell offers investors an attractive blend of income potential, stability and long-term upside within the energy sector.
Story Continues
SHEL’s Operational Excellence Creates a Strong Competitive Edge
Shell continues to demonstrate strong operational execution supported by one of the industry’s most powerful trading and optimization platforms. In the first quarter of 2026, the company delivered resilient performance across key segments despite geopolitical disruptions and volatile commodity markets. Refinery utilization reached an impressive 99%, while LNG Canada ramped up production, helping offset supply challenges in Qatar and Australia. Shell’s planned acquisition of ARC Resources further strengthens its long-term production growth and LNG exposure. The company’s trading business also remained a major earnings driver, boosting profitability across refining, marketing and renewables. Alongside portfolio optimization, cost reductions and improved operational efficiency, Shell’s disciplined execution and trading expertise position the company to generate resilient earnings, stronger margins and consistent cash flows across market cycles.
SHEL’s Strong Price Performance, Estimate Revisions & Valuations
Shellhas posted an impressive performance over the past three months, with its shares rising 7.3% compared with the sub-industry’s 3.9% growth. Peer comparison further highlights the strength, as Shell conveniently outperformed its peers, Chevron and ExxonMobil, which lost 0.5% and 3.6%, respectively, during the same time period.Zacks Investment Research
Image Source: Zacks Investment Research
Over the past 30 days, the Zacks Consensus Estimate for SHEL’s earnings per share has moved higher for 2026 and 2027. The estimates have also been revised upward for CVX and XOM over the same period.Zacks Investment Research
Image Source: Zacks Investment Research
From a valuation perspective — in terms of forward price-to-sales ratio — Shell is trading at a massive discount compared with Chevron and ExxonMobil, making it attractive for investors.
Valuation ComparisonZacks Investment Research
Image Source: Zacks Investment Research
Final Verdict
Shell stands out as an attractive investment opportunity, driven by its resilient integrated business model, strong operational execution and shareholder-focused capital allocation strategy. The company continues to generate robust earnings even in volatile commodity environments, supported by its leading trading and optimization platform, high refinery utilization and growing LNG exposure. Shell’s disciplined cost management and strategic expansion initiatives further strengthen long-term cash flow visibility. At the same time, rising dividends and ongoing share buybacks highlight management’s confidence in the company’s financial strength and commitment to shareholder returns. With shares outperforming key peers while still trading at a valuation discount, Shell offers investors a compelling combination of stability, income potential and long-term upside. Overall, Shell, currently sporting a Zacks Rank #1 (Strong Buy), stands out as a compelling investment opportunity for investors seeking high yield and leverage to favorable crude dynamics, provided they can tolerate geopolitical and commodity-driven risks.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chevron Corporation (CVX) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Shell PLC Unsponsored ADR (SHEL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
View Comments
- BP Just Got a Wall Street Double Upgrade: Argus, RBC Both Turn Bullish on Recovery Story
May 11, 2026
Quick Read
BP (BP) received rare simultaneous upgrades from Argus and RBC Capital, citing Q1 earnings beat, production gains, and new CEO’s deleveraging strategy as inflection catalysts. BP’s strong cash flow and $20 billion divestment plan could narrow the valuation gap with the company’s competitors. The analyst who called NVIDIA in 2010 just named his top 10 stocks and BP wasn't one of them. Get them here FREE.
BP (NYSE:BP) just received a rare same-day double upgrade from Wall Street. Argus moved BP stock to Buy from Hold, and RBC Capital lifted the stock to Outperform from Sector Perform with a 700 GBp price target. The simultaneous bullish shift signals coordinated conviction that BP's recovery story is finally taking shape under new CEO Meg O'Neill.
For long-term investors, the calls warrant a closer look, though BP's history of false starts demands measured optimism. The dual endorsement from Argus and RBC adds credibility to a turnaround thesis that has eluded the stock for years.
Ticker Company Firm Action Old Rating New Rating Old Target New Target BP BP plc Argus Upgrade Hold Buy n/a n/a BP BP plc RBC Capital Upgrade Sector Perform Outperform n/a 700 GBp
The Analyst's Case
Argus cited BP's Q1 2026 earnings beat, increased upstream production, materially higher realized refining margins, and strong oil trading contributions. The firm flagged lower price realizations as a partial offset, yet viewed operational momentum as decisive.
The analyst who called NVIDIA in 2010 just named his top 10 stocks and BP wasn't one of them.Get them here FREE.
RBC's thesis leaned on structural deleveraging. The firm sees the current commodity price environment as another chance for BP to deleverage, pointing to recent exploration success and new management as catalysts that bring an "opportunity to restore investor confidence."
Company Snapshot
BP is a London-based integrated oil and gas major operating bp, Castrol, Amoco, Aral, ampm, and bpx Energy. Q1 2026 EPS came in at $1.24 versus $0.5321 estimated, a 133% surprise, on revenue of $52.26 billion.
BP CEO Meg O'Neill is targeting $20 billion in divestments by 2027 and plans to retire $4.3 billion in hybrid bonds, while reiterating FY2026 capex of $13 to $13.5 billion.
Why the Move Matters Now
BP stock has trailed U.S. peers for years, a gap our recent coverage of BP's turnaround push has tracked closely. Year to date, BP shares are up 27%, ahead of Chevron (NYSE:CVX) at 21%, Exxon Mobil (NYSE:XOM) at 23%, and Shell (NYSE:SHEL) at 16%.
Story Continues
The five-year picture still shows BP at 70% versus Exxon's 144%, leaving room to close the gap. BP's forward P/E ratio of 8x sits near Shell's 8x, and the consensus 12-month price target is $49.54.
BP's net debt rose to $25.3 billion with gearing at 25%, the overhang RBC believes can shrink in a strong commodity tape.
What It Means for Your Portfolio
For BP stock prudent investors, the dual upgrade points to a credible inflection: stronger cash flow, an active divestment program, and a CEO focused on capital discipline. The combination could support both deleveraging and the maintained $0.4992 quarterly dividend.
However, BP has had inflection point calls before. A softening in oil prices, execution slippage on the $20 billion disposal plan, or governance friction (over 18% voted against new Chair Albert Manifold) could derail the thesis.
A measured position size in BP stock makes sense while this recovery proves itself. Investors should keep an eye on the stock as oil markets and divestment milestones unfold.
The analyst who called NVIDIA in 2010 just named his top 10 AI stocks
This analyst's 2025 picks are up 106% on average. He just named his top 10 stocks to buy in 2026. Get them here FREE.
View Comments
- BP, Shell, TotalEnergies Pocket Billions in War-Driven Trading Windfall
May 11, 2026
The European oil majors with the biggest trading desks raised their trading profits by up to $4.75 billion in the first quarter from the end of last year, amid extreme market volatility driven by the war in Iran.
The biggest European majors, BP, Shell, and TotalEnergies, likely earned between $3.3 billion and $4.75 billion more in the first quarter compared to the fourth quarter of 2025, the Financial Times reports, citing estimates from analysts.
Big Oil companies do not disclose their trading profits separately from the overall results, but usually comment on the performance of their trading divisions.
This past quarter, the oil and gas price spike and the heightened volatility drove strong earnings across all majors who have extensive trading desks and divisions. In this segment, Europe's biggest firms outperformed the U.S. supermajors.
Amid the worst disruption in the history of the oil markets, the European majors saw what they described as "exceptional" trading profits, which offset lost production from the Middle East.
For the U.S. majors Chevron and ExxonMobil, their earnings were more closely tied to the loss of Middle Eastern production. Still, the two U.S. firms beat analyst expectations as the oil price surge more than offset the production decline.
Shell last week reported consensus-beating earnings for the first quarter as the war in Iran drove an oil price surge and boosted trading profits at the UK-based supermajor. The company attributed the earnings bump to higher realized liquids prices and significantly higher trading amid unprecedented market volatility.
BP more than doubled its profit for the first quarter from a year earlier as oil prices jumped and oil trading boomed amid the war in the Middle East.
TotalEnergies, for its part, raised its interim dividend by 6% as first-quarter earnings jumped by 30% from a year earlier, pushed up by the spike in oil prices and very strong oil trading results in the wake of the Iran war.
By Michael Kern for Oilprice.com
More Top Reads From Oilprice.com
Japan Receives First Central Asian Crude Since Iran War Began Australia's Biggest Untapped Gas Field Just Got a Lot More Expensive Europe's Renewable-Plus-Battery Market Set to Quintuple by 2030
Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you'll always know why the market is moving before everyone else.
You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions - and we'll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.
View Comments
- Will There Be a Recession in 2026?
May 11, 2026
(1:00) - Breaking Down The Current State of The Stock Market (26:30) - Where Should You Be Looking To Invest Right Now? (47:00) - Episode Roundup: XOM, AES, AXP Podcast@zacks.com
Welcome to Episode #484 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey was joined by Zacks Chief Equity Strategist, John Blank, for another podcast episode examining the US economy and the odds of a recession.
Will there be a recession this year?
Tune into the podcast to find out what Tracey and John think about the possibility of an economic contraction.
Tracey and John, who is a PhD economist, discussed the employment situation, which is improving over 2025.
Will the Iran War be a factor on the US economy this year? Some retailers, and the housing industry, have seen consumers get more cautious because of the war. But the consumer remains resilient in the face of any of these shocks, including tariffs.
The Challenge Facing the Federal Reserve
The Federal Reserve is about to get a new Chairman after eight years of Jerome Powell. How will that impact monetary policy?
Inflation remains elevated over the Federal Reserve’s preferred level of 2%. And with gasoline, jet fuel, and other petrochemical products, like plastics, on the rise, it’s expected to remain elevated.
Will the Fed cut rates this year? Or will the Federal Reserve be forced to raise rates instead?
3 Stocks for Your Watch List Right Now
Warren Buffett is sitting on $400 billion in cash in the Berkshire equity portfolio. What does Warren know?
If you don’t want to chase the AI Revolution stocks, which are booming, here are some other stocks which you might want to include on a watch list.
1. Exxon Mobil Corp. (XOM)
If you think oil is going to stay higher for longer, then investors should consider a big oil company like Exxon Mobil. Exxon Mobil is expected to grow earnings 63.8% this year on higher oil prices. The 2026 Zacks Consensus Estimate has jumped to $11.45 from $6.58 after the start of the Iran War in the last 90 days.
Shares of Exxon Mobil are up 20.1% year-to-date but it’s still cheap. It trades with a forward price-to-earnings (P/E) ratio of 12.8. A P/E ratio under 15 usually indicates value.
Exxon Mobil is also a dividend aristocrat with a long history of paying, and raising, its dividend. It is currently yielding 2.8%.
Exxon Mobil is a Zacks Rank #1 (Strong Buy) due to rising earnings estimates.
Story Continues
Should you buy an oil company stock like Exxon this summer?
2. The AES Corp. (AES)
The AES Corporation is a Fortune 500 energy company. It will report first quarter 2026 earnings on May 13, 2026, after the close.
AES beat the Zacks Consensus Estimate on earnings last quarter by 30.7%. The Zacks Consensus for Q1 is looking for $0.50.
Shares of AES are flat year-to-date. It’s a value stock. AES trades with a forward P/E of 6.2. A P/E ratio under 10 usually means a company is extremely cheap.
AES pays a dividend, with a current yield of 4.9% to reward investors for their patience.
Should a utility like AES be on your watch list this year?
3. American Express Co. (AXP)
American Express is one of Warren Buffett’s favorite companies. Berkshire Hathaway has owned shares of this global payments company since 1991.
American Express is expected to grow earnings by 14.4% this year and another 14.3% next year. Shares have fallen 14.6% year-to-date, however, and that has made them more attractive on a valuation basis. American Express now has a forward P/E of 18.1.
American Express pays a dividend, currently yielding 1.2%.
Is now the time to consider buying a financial company like American Express?
What Else Should You Know About the Outlook for the Economy in 2026?
Tune into this week’s podcast with Tracey and John to find out more.
[In full disclosure, John owns shares of AES in Zacks Large-Cap Trader portfolio.]
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
The AES Corporation (AES) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
View Comments
- The Zacks Analyst Blog Micron, Exxon and RWE AG
May 11, 2026
For Immediate Releases
Chicago, IL – May 11, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Micron MU, Exxon Mobil XOM and RWE AG RWEOY.
Here are highlights from Monday’s Analyst Blog:
Global Oil Shock Modeling: Zacks May Market Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full May Market Strategy reportTo access the full PDF,click here.
To explore a critical macro subject for investors, and currently more formally understand the consequences of this global oil shock? Click this hot link:
“The Impact of the 2026 Iran War on U.S. Inflation: A Scenario Analysis”
It was published in April 2026.
The macro modeling exercise was undertaken by Lutz Kilian, Michael D. Plante, Alexander W. Richter and Xiaoqing Zhou of the Dallas Fed.
I. An Introduction to Macro Oil Shock Modeling
“The outbreak of the Iran War in February 2026 caused a major disruption to oil trade and resulted in a surge in oil prices, which was quickly reflected in higher retail gasoline prices.”
“A question of great interest to policymakers and market participants is to what extent recent and future retail gasoline price increases driven by this geopolitical event will raise headline and possibly core inflation.”
“There is also concern that these gasoline price increases may raise household inflation expectations, amplifying the direct impact of higher gasoline prices.”
“Interest in this question surged in late March 2026.”
“For example, political observers highlighted how E.U. central bankers are agonizing over how to respond to the inflationary pressures caused by the Iran War.”
“Similarly, Federal Reserve officials expressed concern about a short-term increase in inflation stemming from rising energy prices, and the International Monetary Fund warned that ‘if prolonged, higher energy prices will lead to higher headline inflation.’
“We study this inflationary impact based on U.S. data available at the end of March 2026, reflecting the real-time data constraints faced by policymakers.”
“Our analysis helps assess the impact on U.S. inflation under a range of alternative scenarios that could play out in the future.”
MODELING THE IMPACT OF GEOPOLITICAL OIL SUPPLY DISRUPTIONS
“In March 2026, the WTI price of oil increased from about $60 per barrel in late January, before military action was anticipated, to $91 per barrel on average, alongside broad-based increases in refined product prices (e.g., gasoline, diesel, and jet fuel).”
Story Continues
“In our baseline specification, the magnitude of the geopolitical oil production disruption is set to 20% of global oil production (ζe = 0.2), corresponding to a cessation of all oil exports from the Persian Gulf.”
“The expected duration of this disruption is set to 3 quarters (q¯e = 0.67), matching the length of the disruption that followed the Arab-Israeli War in 1973.”
“The subsequent effects depend on when oil shipments resume.”
“For example, if the Strait reopens after one quarter, the oil price drops to $71 per barrel in quarter 2.”
“When the oil supply shortfall lasts longer than one quarter, richer dynamics arise.”
Extending the closure to two quarters causes the oil price to rise further to $132 per barrel in Q2 before falling to $85 per barrel in Q3.
If shipping resumes after three quarters, the oil price will rise even further before declining, reaching $167 per barrel in Q3.
“Taking into consideration the path of oil and gasoline prices in each case, the model predicts that closing the Strait of Hormuz for 1, 2, or 3 quarters would increase Q4/Q4 headline PCE inflation in 2026 by 0.35, 0.79 and 1.47 percentage points, respectively.”
“The corresponding effect on core PCE inflation would only be 0.18 percentage points if the closure ends after one quarter.”
“But would rise to 0.31 and 0.49 percentage points if the closure persists for two or three quarters, suggesting potentially sizable effects on core inflation.”
The massive implication: The FOMC would be forced to raise their policy rate, if there indeed is a 0.5% rise in the U.S. core PCE inflation rate.
Note that Info Tech and Energy now lead our list at “Very Attractive." That forced S&P500 sector ranking screams “AI cap-ex buildout” and “Global oil shock.”
Read on to find the large-cap stock picks in Zacks #1 Rank list to play for aligning with that earnings out-performance.
II. Zacks May 2026 Sector/Industry/Company Telescope
April 30th, 2026 data showed Info Tech remained dominant at Very Attractive. Semiconductor EPS growth stays aloft via “AI” chips. Electronics looks great.
Energy stayed Very Attractive rating; Iran plays a major factor.
Utilities fell to Attractive, as Nat Gas Distributors led. Communication Services fell to Attractive from Very Attractive. The “AI” Telco Equipment group ranked very high.
Financials stayed Market Weight. Rising global recession risk, a private credit debacle, and possible Fed rate hikes downshifted the momentum here.
Industrials stayed at a Market Weight rating. Metal Fabricating and Pollution Control took the lead in that sector.
Health Care stayed on a Market Weight group too.
Materials remained at an Unattractive rating.
The big move up?
Consumer Staples and Consumer Discretionary rose to Market Weights, from Unattractive ratings.
The Forced Ranking:
(1) Info Tech stays Very Attractive. Semis, Electronics, & Computer-Office led.
A Zacks #1 Rank (STRONG BUY) Large Cap Stock: Micron
(2) Energy stays Very Attractive. Oil & Gas Integrated, Oil Miscellaneous, and Oil E&P led the way. A Zacks #1 Rank (STRONG BUY) Large Cap Stock: Exxon Mobil
(3) Utilities fell to Attractive from Very Attractive. Utility-Gas Distribution best.
A Zacks #1 Rank (STRONG BUY) Large Cap Stock: RWE AG
Note: RWE AG is among Europe's five largest utilities.
(4) Communications Services fell to Attractive from Very Attractive. Telco Equipment stayed strong, once again. It is an “AI” group.
(5) Industrials stayed Market Weight. Metal Fabricating, and Pollution Control looked the best.
(6) Financials stayed Market Weight. Real Estate, Finance, and Investment Banking & Brokering looked best.
(7) Health Care stayed at Market Weight. Drugs and Medical Care looked best.
(8) Consumer Staples rose to Market Weight from Unattractive. Agri-business and Food/Drug Retail looked the best.
(9) Consumer Discretionary rose to Market Weight from Unattractive. Consumer Electronics looked the best.
(10) Materials stayed Unattractive. Building Products looked OK.
Now, let’s wrap it out, and see what oil industry execs think.
III. Conclusion
The Dallas Fed views the 3-quarter shock as a plausible "stressed" baseline.
It represents a world where oil hits $167, gasoline likely exceeds $5.00/gal nationally, and core inflation is dragged upward by nearly half a percent.
Will a three-quarter long global oil shock really happen?
While the working paper provides the mathematical analysis, the Dallas Fed's Energy Survey (April 2026 Update) provides the "market" probability -- based on responses from 120 oil and gas executives:
26% Probability:Executives specifically expect the disruption to last until November 2026 (3 quarters).
14% Probability:Executives expect the disruption to last longer than 3 quarters.
Their Aggregated Probability?
Collectively, oil and gas industry experts currently assign a 40% probability -- to a global oil shock lasting 3 quarters, or more.
That probability is dynamic.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Get all the details here >>
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
RWE AG (RWEOY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
View Comments
- Oil giants burnt by Chavez eye Venezuela’s new black gold rush
May 11, 2026
The US flag flutters at a makeshift American embassy in Caracas, a hotspot for oilmen racing to secure resources - Maryorin Mendez/AFP via Getty Images
A week after US troops smuggled then-president Nicolas Maduro out of Venezuela in early January, the boss of ExxonMobil told Donald Trump that the oil-rich, dirt-poor country was “uninvestable”.
It didn’t take him long to change his tune.
“Venezuela is a huge resource that’s now opened up more freely to the world,” Darren Woods, Exxon’s chief, said in late April after dispatching a technical evaluation team to the country.
“I feel positive about what’s happening, the opportunity there.”
He’s not the only one.
Oil industry dealmakers have been schmoozing with US politicians and jetting into Venezuela’s capital, Caracas, in recent weeks to get ahead in the scramble for its black gold.
The country has the biggest oil reserves in the world, but American sanctions against the anti-US Maduro regime left the country largely off-limits to most of the global oil giants.
Many oil majors also carry lasting scars from a decade earlier, when Maduro’s predecessor, Hugo Chávez, seized their assets. Several companies are still owed billions of dollars.
But now the Caracas JW Marriott hotel, which hosts a makeshift US embassy, is crawling with oilmen.
Chevron, BP, Shell, Repsol, Eni, ExxonMobil and ConocoPhillips have joined a host of smaller rivals all looking to get in early as Trump reopens Venezuela’s moribund oil and gas industry to foreign players.
Trump himself, as he struggles to make headway in his war on Iran, is revelling in the Venezuelan oil rush.
“I was with ExxonMobil last night. The president of the company was here. And we were talking about Venezuela. [...] Chevron was all here last night. They all want to go there,” he said in Washington last week.
“It’s been a great thing for Venezuela. People are really happy. They’re dancing in the streets because there’s a lot of money coming in through the big oil companies that are moving in there.”
Venezuela’s new president, Delcy Rodríguez, will only hold on to her post if she delivers Trump’s demand for quick and open access for the oil companies. Unsurprisingly, she’s rolling out the red carpet.
But she sits atop a largely unreconstructed regime, built on the same politicians who terrorised their political opponents and ran the economy – and the oil industry – into the ground.Venezuela’s new president was previously oil minister during Maduro’s tenure - Maxwell Briceno/Anadolu via Getty Images
Nobody can yet be sure if she and the Trump administration can reform and rejuvenate Venezuela.
The oil execs worry that corruption, factional infighting, vested interests and incompetence could send the country spiralling back down, particularly if Washington becomes distracted elsewhere.
“Delcy Rodríguez is probably trying to find an equilibrium that will keep everyone happy, and that could enable Venezuela to survive past Trump. The problem is, it doesn’t feel like a permanent thing,” says Pablo Ribeiro Uchoa, of University College London.
Story Continues
Rodríguez, who was oil minister under Maduro, has rolled the pitch with a new hydrocarbon law.
This gives the oil giants greater control of their operations in the country, halves their royalty bills and bolsters the process of dispute resolution.
But the regulatory fine print is yet to be nailed down, leaving the oil companies waiting for clarity about how safe their money will be.
The hydrocarbon law “moves things in a positive direction”, Mike Wirth, the boss of Chevron, told CBS News. “It still needs some work, it’s probably not enough to bring in the level of investment that would be desirable.”
What has prompted the companies to throw some of their caution to the wind, though, is the upheaval of the Iran war.
“It’s very difficult to ignore Venezuela in the context of the Iran war. Not only because of the price dynamics and the supply shortages, but also because of the lessons learned about diversification of suppliers, and diversification of risk,” says Luisa Palacios, of Columbia University’s Centre on Global Energy Policy.1005 Total proved reserves of oil
With oil prices high and supply chains broken, there’s a push to get Venezuelan crude into the Gulf of America’s refineries as quickly as possible.
Chevron, which remained in Venezuela when most others pulled out, has stepped up its interest quickly.
It has conducted an asset swap with the state-owned oil company Petróleos de Venezuela (PDVSA). This has boosted its rights to exploit some oilfields, and increased its equity stake in its Petroindependencia joint venture to 49pc.
Similarly, Spain’s Repsol has signed a deal to resume control of its Venezuelan oil assets. It aims to boost its crude output from those projects by 50pc within 12 months and to triple it over the next three years. It will also step up gas production by 10pc.
PDVSA still owes Repsol almost $4.6bn, although Josu Jon Imaz San Miguel, its chief executive, is hopeful that Venezuela’s re-opening will increase the possibility of repayment.
“I’m sure that we are going to find windows of opportunity to talk and to try to address this question,” he said.
Shell has also inked deals with the new regime to look at oil and gas developments. The priority is a plan to pipe gas from the Dragon offshore field to its liquefied natural gas plant in nearby Trinidad & Tobago.
Other projects “will take quite some time to gestate”, Sawan Wael, the Shell boss, warned investors.The country’s ageing infrastructure will need to be fixed – to the tune of tens of billions of dollars - Federico Parra/AFP via Getty Images
Elsewhere, ConocoPhillips is still owed about $12bn from Chávez’s expropriation of its interests in the early 2000s. So far, it has sent an evaluation team to “better understand the potential for in-country oil and gas opportunities”.
BP has signed a memorandum of understanding on “potential areas for co‑operation in material offshore gas and future exploration”.
Italy’s Eni is also weighing up the next move for its Venezuelan offshore oil and gas interests. Its chief, Claudio Descalzi, was in Caracas at the end of April, meeting Rodríguez and the PDVSA top brass.
However, the flurry of oil chiefs dropping by the presidential palace in Caracas does not yet mean that serious money is pouring in, Palacios warns.
“The companies are saying, ‘What has happened is enough for us to start the conversation, to start to consider the investments’. It’s not yet a done deal,” she says.
“Right now I see a lot of spending that can be recovered fast. A lot of scaffolding still needs to take place, to translate significant interest and announcements into actual investments.”
One oil exec admits as much: “Everything seems to have gone really quickly, and there’s a lot of expectation, but on the ground things are not moving so fast,” he says.
“It’s moving more quickly than expected, yes, but not as fast as the US administration would like.”
Palacios says oil companies need to see the rule of law taking root, so they can be sure their investments are protected this time.
Yet this might not necessarily mean a shift to democracy, says Caracas-based Phil Gunson, of the International Crisis Group.
“If what the US really wants is a friendly Venezuelan government open to US businesses, then it’s already got a large part of that,” he says.
The Trump administration says elections and a democratic transition are part of its plan, but it is wary of repeating the chaos of Iraq.
“Political transitions are complicated and difficult to manage. It’s quite possible to imagine that there could be a hard line backlash to it,” says Gunson.
There is a more urgent task: fixing the country’s creaking infrastructure, which will cost tens of billions of dollars.
“It’s not a question of getting an oil concession, showing up with your workers and turning on the tap. All the infrastructure is seriously deteriorated,” Gunson says.
“It’s not just the oil installations themselves, but also rebuilding the electricity infrastructure. If you imagine an economy that starts to grow at 10pc a year, say, the electricity industry simply couldn’t keep pace. And everything else, from roads to water to hospitals to the internet, is in a total mess.”
The rush to repair infrastructure could spark an economic surge, with some pundits predicting a construction boom that could fuel double-digit GDP growth this year.
Meanwhile, despite the dilapidation, more oil is already starting to flow. Since Maduro’s ousting, exports to the US have averaged more than 300,000 barrels a day – almost triple the rate of last year.
Although the Trump administration controls the flow of oil revenue, the increased output is likely to give the Rodríguez regime some financial firepower to win over the population.
Venezuelans might not be dancing in the streets yet, but they could potentially see an easing in the country’s rampant inflation.
That may help Rodríguez cement her authority. But she remains at the whim of the White House and the threat of an election that could unleash unknown political forces.
These risks loom large over the oil lucre.
“Will the Delcy government survive? If it does, how is it going to evolve? Will there at some point be institutional reform? How long is it going to take?” Gunson says.
“If you had a billion or two in your back pocket and you were looking for somewhere to invest it, I would think that there are probably safer places than Venezuela.”
View Comments
- Income Investors Should Know That Exxon Mobil Corporation (NYSE:XOM) Goes Ex-Dividend Soon
May 11, 2026
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Exxon Mobil Corporation (NYSE:XOM) is about to go ex-dividend in just three days. The ex-dividend date is usually set to be one business day before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase Exxon Mobil's shares on or after the 15th of May will not receive the dividend, which will be paid on the 10th of June.
The company's next dividend payment will be US$1.03 per share, on the back of last year when the company paid a total of US$4.12 to shareholders. Calculating the last year's worth of payments shows that Exxon Mobil has a trailing yield of 2.8% on the current share price of US$144.57. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Exxon Mobil has been able to grow its dividends, or if the dividend might be cut.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Exxon Mobil paid out more than half (68%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out 92% of its free cash flow in the form of dividends last year, which is outside the comfort zone for most businesses. Cash flows are usually much more volatile than earnings, so this could be a temporary effect - but we'd generally want to look more closely here.
While Exxon Mobil's dividends were covered by the company's reported profits, cash is somewhat more important, so it's not great to see that the company didn't generate enough cash to pay its dividend. Cash is king, as they say, and were Exxon Mobil to repeatedly pay dividends that aren't well covered by cashflow, we would consider this a warning sign.
Story Continues
See our latest analysis for Exxon Mobil
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.NYSE:XOM Historic Dividend May 11th 2026
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Exxon Mobil's earnings per share have risen 15% per annum over the last five years. Earnings have been growing at a decent rate, but we're concerned dividend payments consumed most of the company's cash flow over the past year.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Exxon Mobil has delivered an average of 3.5% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
To Sum It Up
Should investors buy Exxon Mobil for the upcoming dividend? The best dividend stocks typically boast a long history of growing earnings per share (EPS) via a combination of earnings growth and buybacks. So, you might think that Exxon Mobil buying back stock, growing its EPS, and retaining profits within its business is a good combination. However, we note with some concern that it paid out 92% of its free cash flow last year, which is uncomfortably high and makes us wonder why the company chose to spend even more cash on buybacks. Overall, it's hard to get excited about Exxon Mobil from a dividend perspective.
However if you're still interested in Exxon Mobil as a potential investment, you should definitely consider some of the risks involved with Exxon Mobil. For example, we've found 1 warning sign for Exxon Mobil that we recommend you consider before investing in the business.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
View Comments
- The Zacks Analyst Blog Micron, Exxon and RWE AG
May 11, 2026 · zacks.com
Dallas Fed models show a 3-quarter Iran War oil shock could lift core inflation and push oil to $167, reshaping sector outlooks.
