Key Highlights
- Goldman Sachs has identified five Buy-rated energy stocks: Halliburton, Cenovus, ConocoPhillips, Valero, and Diamondback Energy
- The investment bank elevated its Q4 2026 Brent crude projection to $90 per barrel due to reduced Middle Eastern production
- Ongoing Strait of Hormuz constraints continue limiting global oil supply, with export normalization delayed until late June
- Refining sector experiences structural supply constraints, with Valero reporting Gulf Coast metrics up 95% annually
- Citi projects a potential Brent price spike to $150 per barrel under extended Hormuz disruption scenarios
Goldman Sachs has released new research highlighting five energy stocks with Buy ratings, emphasizing that the industry is beginning a fresh capital expenditure phase. According to the firm, producers must replenish reserves while satisfying worldwide energy requirements.
The selected stocks include Halliburton, Cenovus, ConocoPhillips, Valero, and Diamondback Energy.
Concurrently, Goldman Sachs has upgraded its Brent crude projection to $90 per barrel for the fourth quarter of 2026. The firm similarly increased its WTI estimate to $83 per barrel for the corresponding timeframe.
These updated projections reflect declining oil production from Middle Eastern sources. Diplomatic negotiations between the United States and Iran have reached an impasse, while shipping through the Strait of Hormuz continues facing limitations.
Goldman Sachs currently anticipates Hormuz export levels will return to normal operations by late June, a delay from the previously projected mid-May timeline. Recovery of Gulf region oil production is likewise expected to proceed more gradually than initial forecasts suggested.
Citi has similarly increased its Brent outlook, establishing a base scenario of $110 per barrel for Q2 2026. Their optimistic projection envisions Brent reaching $150 should Hormuz disruptions extend throughout June.
Goldman’s Brent futures contracts for 2028–2030 currently settle between $70 and $75 per barrel, positioned beneath the bank’s internal valuation range of $75–$80. According to the firm, accelerating U.S. shale production growth represents a critical factor for preventing supply shortfalls in 2026.
Investment Rationale for These Five Equities
Halliburton delivered Q1 2026 earnings that surpassed market expectations. The firm secured a contract in Argentina while announcing a partnership with Greenland Energy covering consulting and logistics operations. Multiple financial institutions elevated their price objectives following these results.
Cenovus presents expansion opportunities through its Christina Lake and West White Rose developments projected for 2030. S&P Global Ratings modified its Cenovus outlook to stable from negative, acknowledging advances in debt reduction efforts.
ConocoPhillips earned placement on Goldman’s U.S. conviction roster. The bank emphasizes free cash flow expansion from Alaskan operations and LNG ventures, encompassing Willow and Qatar projects, anticipated by 2030. Raymond James and Piper Sandler each raised their price targets on the equity.
Refining Sector and Shale Production Developments
Valero capitalizes on constrained refining market conditions. Middle Eastern refinery disruptions currently exceed seasonal averages by 1.7 million barrels daily. Gulf Coast refining metrics for the first half of 2026 demonstrate a 95% increase compared to the prior year period. Goldman forecasts approximately 10% free cash flow yield for Valero spanning 2026 through 2028.
Diamondback Energy holds a favorable competitive position among shale operators. The company maintains a robust drilled-but-uncompleted well inventory in the Permian Basin. Management plans to expand frac crews from 4.5 to approximately five while reporting pre-hedge oil prices for Q1 2026 that exceeded forecasts.
Crude oil prices advanced on Monday as diplomatic discussions between the U.S. and Iran stalled while Hormuz shipping lanes remained constrained.
