Exxon Mobil Corp XOM shares are trading higher by 1.9% to $108.45. Shares of oil companies are trading higher as crude rises after the U.S. on Thursday imposed sanctions on two shipping companies for violating the price cap on Russian oil. Additionally, the Israel-Hamas conflict has caused supply uncertainty.
Amid the turmoil in the Middle East, oil emerged as the primary beneficiary. The West Texas Intermediate (WTI) crude oil price surged by over 3.5%, surpassing the $85 per barrel mark.
Why It Matters
The conflict in the Middle East, particularly in areas like Israel and the Gaza Strip, can disrupt the flow of oil in the region. The Middle East is a major oil-producing region, and any instability or supply disruptions can lead to concerns about oil availability.
Exxon Mobil, being an energy company, benefits from rising oil prices and supply disruptions because it can potentially sell its oil and gas products at higher prices.
See Also: Goldman Sachs Bullish On Crude Oil With Israel, Hamas At War
In general, geopolitical tensions and conflicts in oil-producing regions often lead to an increase in oil prices. This is due to concerns about potential supply disruptions, which can reduce the global oil supply.
Higher oil prices can directly benefit Exxon Mobil's profitability because it can sell its oil at higher market prices, leading to increased revenues and potentially higher stock prices.
According to data from Benzinga Pro, XOM has a 52-week high of $120.70 and a 52-week low of $98.02.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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