Trump Prepares Maximum Pressure On Iran: Oil Jumps Above $73, Energy Stocks Rally

Oil markets reversed course sharply on Tuesday morning following reports that President Donald Trump is preparing to issue a memorandum directing the U.S. Treasury to impose maximum economic pressure on Iran.

The directive aims to enforce sanctions and block all potential paths for Iran to develop a nuclear weapon, according to a Reuters report.

The new directive may require the U.S. Secretary of State to modify or revoke existing sanctions waivers and collaborate with the Treasury Department to implement a plan aimed at eliminating Iran’s oil exports, according to a U.S. official.

“A bold move considering Iran still ships as much as 1.3 million barrels per day, mostly to China,” commented oilprice.com.

The news outlet indicated that global oil supply could tighten overnight and noted that the last time Trump fully enforced Iranian sanctions, oil prices surged past $80.

Oil Prices Rebound From Session Lows

Crude oil prices initially declined overnight amid demand concerns following Chinese trade countermeasures against U.S. tariffs.

Yet, oil prices erased their losses amid news of Trump’s potential actions on Iran, rallying on fears of potential supply disruptions.

West Texas Intermediate crude surged above $73 per barrel after hitting a session low of $70, reflecting a sharp intraday swing. Brent crude followed a similar pattern, rising as traders recalibrated expectations for global supply.

Traders will closely watch for further developments regarding the directive and the upcoming meeting between Israeli Prime Minister Benjamin Netanyahu and Trump on Tuesday, which could further shape U.S. policy on Iran and energy markets.

Energy Stocks Outperform

The broader energy sector saw significant gains as oil prices rebounded. The Energy Select Sector SPDR Fund XLE jumped 1.9%, leading all other sectors. Major oil companies also saw strong moves higher, with both Exxon Mobil Corp. XOM and Chevron Corp. CVX climbing 2.2%.

On Tuesday, Goldman Sachs raised its 12-month price target on Chevron from $182 to $183, implying an 18% upside from current levels. Analyst Neil Mehta reiterated Chevron as a “top Super Major pick for 2025,” citing three key factors such as strong capital returns, major project ramp-ups and margin expansion.

Goldman expects Chevron to return approximately one-third of its market cap to shareholders over the next three years through dividends and share buybacks. The stock currently yields 4.6%.

Key growth drivers include increased production from the Permian Basin, U.S. Gulf of Mexico, and Kazakhstan’s Tengiz field.

Finally, the company is expected to improve profitability through cost-cutting and operational efficiencies.

Goldman projects free cash flow of $22 billion in 2025 and $28 billion in 2026, assuming Brent crude prices of $76 and $80 per barrel, respectively. This equates to an FCF yield of 9% in 2025 and 11% in 2026.

Goldman Sachs adjusted its 12-month price target on Exxon from $123 to $117, holding a ‘Neutral’ rating.

The firm acknowledges Exxon's strong operational execution and premium upstream portfolio—including assets in Guyana, LNG, and the Permian—but cites valuation concerns relative to peers.

“While we remain constructive on XOM's strong track record of quarterly and operational execution, we remain mindful of relative valuation,” the bank stated, highlighting that Exxon’s 2026 FCF yield of 8% lags behind Chevron and ConocoPhillips COP, which are projected at 11%.

Read Next: