Senior Contributor, covers stocks
Apr 05, 2026
Forbes
Since the Iran war began, oil, gasoline, and diesel prices have surged between 38% and 70%. Here are some examples of price increases since Feb. 28:
WTI crude oil up 69.9% per barrel – from $65.65 to $111.54.
Regular unleaded gasoline national average price per gallon up 37.9% – from $2.98 to $4.11.
Diesel national average price per gallon up 50.8% – from $3.72 to $5.61.
These increases have happened despite a glut of U.S. energy. More specifically, the U.S. produces 1.3 million more barrels per day of energy than the 20.4 million bpd it consumes.
How so? In 2025, the U.S. produced the equivalent of 21.7 million bpd – including 13.6 million bpd in crude oil production and 8.1 million bpd through natural gas plant liquids, biofuels, and refinery processing gains, according to the U.S. Energy Information Administration.
There is a technical subtlety to this analysis. The U.S. exports 2.8 million bpd more than we import, per the EIA. However, we import 6.2 million bpd worth of heavy crude.
That’s because most of our refineries – which are in the U.S. Gulf Coast — process heavy, sour crude from Venezuela, Mexico, Canada, and the Middle East. U.S. shale production – accounting for our net exports – is predominantly light, sweet crude, notes The Baker Institute.
Despite record production, U.S. oil prices are set on the global market for four interconnected reasons:Oil is a globally fungible commodity. "Crude oil and petroleum product prices are the result of thousands of transactions taking place simultaneously around the world… Oil markets are essentially a global auction — the highest bidder will win the available supply," as the EIA explained.
The 2015 export ban repeal integrated U.S. oil into world markets. Before Congress lifted the crude oil export ban in December 2015, WTI crude traded at a $10 to $29 a barrel discount below Brent due to a domestic shale oil glut. After the ban was lifted, U.S. crude exports rose from 0.4 million bpd to 4.0 million bpd – which “expanded the market for U.S. crude oil to overseas buyers and allowed U.S. crude oil producers to charge higher prices,” noted the U.S. GAO.
Arbitrage enforces price convergence. If U.S. crude was priced below the world price, instantaneous global trading would bid up the price until the gap closed.
Gasoline is priced globally regardless of crude pricing. Even if domestic crude were cheaper, gasoline and diesel prices would not follow, because refined products trade freely internationally, according to the Dallas Federal Reserve.
The five weeks since February 28 produced a dramatic sector rotation. Energy stocks achieved their second-best quarter relative to the S&P 500 since 1999, while software stocks plunged – due to fears AI would wipe out their revenues.
Biggest Gainers Since Late February 2026
The energy sector (XLE) has gained about 41% year-to-date, outpacing the next-best sector by more than 30 percentage points. ExxonMobil hit all-time highs, gaining nearly 39%, while Chevron rose 35%.
Other energy industry winners include Marathon Oil, a Permian Basin producer whose stock is up 67%; Berkshire-backed oil producer Occidental Petroleum (+60%); Shale producer Devon Energy (+67%); and oil refiner Valero Energy whose sharply expanding margins helped boost its shares by 52%.
AI-related hardware names — particularly data storage and optical networking — also surged on unrelated demand tailwinds. These include AI flash storage provider SanDisk which enjoyed a 168% increase in its stock on high demand for its products and AI optical networking company Lumentum – shares of which are up 91%.
Fear of being displaced by AI sent shares of software companies plunging. Language learning app Duolingo suffered a 43% drop in its shares; database provider MongoDB (-42%); Enterprise SaaS platform Workday (-40%); and Microsoft (-23%) were among the biggest losers.
Since there is more supply of oil than demand, once the Strait of Hormuz reopens, Brent crude’s price is likely to fall back to the $60 to 80 range by year-end, noted FXOpen.
Therefore, risk-seeking investors may consider placing bets on a drop in the share prices of the large oil companies which have enjoyed steep, rapid gains since the end of February.
Meanwhile, it will take much more than unblocking the global flow of oil to make software stocks attractive. For example, to make its stock a buy, Microsoft must execute a difficult-to-achieve improvement in its AI strategy – both its chatbot and agentic AI tools – to surpass industry leaders in delivering value to end users.
Summary
TOPSHOT - A view of the Marathon Petroleum Corp's Los Angeles Refinery in Carson, California, April 25, 2020 after the price for crude plunged into negative territory for the first time in history on April 20. - Although oil prices have stabilized somewhat since the unprecedented dive, the world remains in the throes of a glut of crude oil caused by a precipitous fall in demand due to the global coronavirus pandemic coupled with a lack of storage capacity for crude already in transit or still being produced. (Photo by Robyn Beck / AFP) (Photo by ROBYN BECK/AFP via Getty Images)... MoreAFP via Getty Images
The U.S. produces more energy than it consumes. Yet the price of oil has soared about 70% since Feb. 28 when the U.S. and Israel attacked Iran, according to LiteFinance.
The reason? Oil trades on a global market – spurred forward in 2015 when a ban on U.S. oil exports was lifted, noted Bloomberg. Moreover, as has been known for weeks, the largely shuttered Strait of Hormuz has stopped the flow of 20% of the world’s oil supply, per the International Energy Agency.
In the stock market, the surge in energy prices since Feb. 28 has created some surprises. Many of the winners have been energy companies – but a memory chip maker and vaccine producer Moderna have also enjoyed share price gains.
The losing side features software companies damaged by something other than higher oil prices – the SaaSpocalypse, about which I wrote in February.
- Despite a U.S. energy surplus, oil prices soared up to 70% since late February due to global market trading and the Strait of Hormuz cutting 20% of world supply.
- This global integration, solidified by the 2015 U.S. export ban repeal, led to significant price hikes across WTI crude, gasoline, and diesel.
- Energy stocks saw massive gains, some over 60%, alongside certain AI-related hardware firms, while software companies suffered sharp declines from AI displacement fears.
The U.S. produces more energy than it consumes. Yet the price of oil has soared about 70% since Feb. 28 when the U.S. and Israel attacked Iran, according to LiteFinance.
The reason? Oil trades on a global market – spurred forward in 2015 when a ban on U.S. oil exports was lifted, noted Bloomberg. Moreover, as has been known for weeks, the largely shuttered Strait of Hormuz has stopped the flow of 20% of the world’s oil supply, per the International Energy Agency.
In the stock market, the surge in energy prices since Feb. 28 has created some surprises. Many of the winners have been energy companies – but a memory chip maker and vaccine producer Moderna have also enjoyed share price gains.
The losing side features software companies damaged by something other than higher oil prices – the SaaSpocalypse, about which I wrote in February.
Despite A U.S. Surplus, Energy Prices Up Are Way Up
Since the Iran war began, oil, gasoline, and diesel prices have surged between 38% and 70%. Here are some examples of price increases since Feb. 28:
WTI crude oil up 69.9% per barrel – from $65.65 to $111.54.
Regular unleaded gasoline national average price per gallon up 37.9% – from $2.98 to $4.11.
Diesel national average price per gallon up 50.8% – from $3.72 to $5.61.
These increases have happened despite a glut of U.S. energy. More specifically, the U.S. produces 1.3 million more barrels per day of energy than the 20.4 million bpd it consumes.
How so? In 2025, the U.S. produced the equivalent of 21.7 million bpd – including 13.6 million bpd in crude oil production and 8.1 million bpd through natural gas plant liquids, biofuels, and refinery processing gains, according to the U.S. Energy Information Administration.
There is a technical subtlety to this analysis. The U.S. exports 2.8 million bpd more than we import, per the EIA. However, we import 6.2 million bpd worth of heavy crude.
That’s because most of our refineries – which are in the U.S. Gulf Coast — process heavy, sour crude from Venezuela, Mexico, Canada, and the Middle East. U.S. shale production – accounting for our net exports – is predominantly light, sweet crude, notes The Baker Institute.
Why Does Oil Trade On A Global Market?
Despite record production, U.S. oil prices are set on the global market for four interconnected reasons:Oil is a globally fungible commodity. "Crude oil and petroleum product prices are the result of thousands of transactions taking place simultaneously around the world… Oil markets are essentially a global auction — the highest bidder will win the available supply," as the EIA explained.
The 2015 export ban repeal integrated U.S. oil into world markets. Before Congress lifted the crude oil export ban in December 2015, WTI crude traded at a $10 to $29 a barrel discount below Brent due to a domestic shale oil glut. After the ban was lifted, U.S. crude exports rose from 0.4 million bpd to 4.0 million bpd – which “expanded the market for U.S. crude oil to overseas buyers and allowed U.S. crude oil producers to charge higher prices,” noted the U.S. GAO.
Arbitrage enforces price convergence. If U.S. crude was priced below the world price, instantaneous global trading would bid up the price until the gap closed.
Gasoline is priced globally regardless of crude pricing. Even if domestic crude were cheaper, gasoline and diesel prices would not follow, because refined products trade freely internationally, according to the Dallas Federal Reserve.
Which Stocks Are The Biggest Winners And Losers?
The five weeks since February 28 produced a dramatic sector rotation. Energy stocks achieved their second-best quarter relative to the S&P 500 since 1999, while software stocks plunged – due to fears AI would wipe out their revenues.
Biggest Gainers Since Late February 2026
The energy sector (XLE) has gained about 41% year-to-date, outpacing the next-best sector by more than 30 percentage points. ExxonMobil hit all-time highs, gaining nearly 39%, while Chevron rose 35%.
Other energy industry winners include Marathon Oil, a Permian Basin producer whose stock is up 67%; Berkshire-backed oil producer Occidental Petroleum (+60%); Shale producer Devon Energy (+67%); and oil refiner Valero Energy whose sharply expanding margins helped boost its shares by 52%.
AI-related hardware names — particularly data storage and optical networking — also surged on unrelated demand tailwinds. These include AI flash storage provider SanDisk which enjoyed a 168% increase in its stock on high demand for its products and AI optical networking company Lumentum – shares of which are up 91%.
Biggest Losers Since Late February 2026
Fear of being displaced by AI sent shares of software companies plunging. Language learning app Duolingo suffered a 43% drop in its shares; database provider MongoDB (-42%); Enterprise SaaS platform Workday (-40%); and Microsoft (-23%) were among the biggest losers.
Where Do We Go From Here?
Since there is more supply of oil than demand, once the Strait of Hormuz reopens, Brent crude’s price is likely to fall back to the $60 to 80 range by year-end, noted FXOpen.
Therefore, risk-seeking investors may consider placing bets on a drop in the share prices of the large oil companies which have enjoyed steep, rapid gains since the end of February.
Meanwhile, it will take much more than unblocking the global flow of oil to make software stocks attractive. For example, to make its stock a buy, Microsoft must execute a difficult-to-achieve improvement in its AI strategy – both its chatbot and agentic AI tools – to surpass industry leaders in delivering value to end users.
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