WTI crude oil prices fell 31% during the second quarter, changing sentiment across the energy market. While such a sharp decline may make oil look more attractively priced, it does not necessarily mean that the risks have disappeared.
For investors considering the recent pullback as a buying opportunity, energy-related stocks, such as Global Partners LP GLP, National Energy Services Reunited NESR and Imperial Oil IMO could be attractive investment candidates. The opportunity is not based on the expectation of an immediate rebound in oil prices. Instead, the sharp decline has lowered expectations across the energy sector, potentially creating attractive entry points for fundamentally strong companies.
Oil Looks Cheaper but Not Necessarily Safer
U.S. benchmark WTI crude settled at $69.50 a barrel on June 30, after falling 20% in June and 31% for the quarter. That marked the largest quarterly decline since the first quarter of 2020.
The move brought prices back near levels seen before the Iran conflict. For many investors, this raises a natural question: has the market overreacted, or is it simply adjusting to a less severe supply picture?
A sharp drawdown can create better entry prices, but it can also signal that traders no longer see the same shortage risk. In plain terms, cheaper oil is not the same as low-risk oil.
Why WTI Fell So Quickly
WTI crude prices declined as concerns over supply disruptions in the Persian Gulf eased faster than many had expected. A prolonged U.S.-Iran cease-fire in June reduced fears that oil shipments through the region would face major disruptions.
Several other developments also helped stabilize the market. China reduced its crude oil imports, countries released oil from emergency reserves, and more tankers resumed passing through the Strait of Hormuz. At the same time, producers and buyers found alternative ways to keep oil flowing to major markets.
As supply concerns eased, the extra risk premium built into oil prices began to disappear. Once it became clear that global oil supplies remained largely intact, WTI gave up much of the price gains that had been driven by geopolitical tensions.
What Could Support the Commodity Going Forward
One possible support for oil prices is the rebuilding of emergency crude oil reserves. If countries begin replenishing the stockpiles they used during recent supply disruptions, demand for physical oil could increase.
Another factor to watch is geopolitical risk. Any fresh tensions in the Middle East could push oil prices higher again, particularly if markets become concerned about disruptions to oil production or shipping routes.
These factors do not guarantee that oil prices will rise. However, they could help support the market after the sharp decline in the second quarter. Investors should view them as potential positives while remaining prepared for continued price volatility.
What Could Keep WTI Under Pressure
The biggest risk for oil prices is a continued increase in supply. If oil production in the Middle East keeps recovering and other major producers continue raising output, it could limit any meaningful rise in crude prices.
Iran is another important factor. If sanctions are eased and the country is able to increase oil production significantly, additional supply could enter the market at a time when demand has already weakened in some regions.
For investors, the takeaway is simple. Oil prices are lower than they were a few months ago, but a sustained recovery will likely require stronger demand, renewed stockpile rebuilding or fresh geopolitical tensions that tighten global supplies.
How Investors Can Approach the Current Oil Market
The sharp drop in oil prices has made the energy sector more interesting but investors should remain selective. Rather than betting directly on a recovery in crude oil prices, some investors may prefer companies whose businesses are linked to the energy market.
This is where Global Partners LP, National Energy Services Reunited and Imperial Oil deserve attention. These companies — each carrying the coveted Zacks Rank #1 (Strong Buy) — offer different ways to gain exposure to the energy sector, allowing investors to focus on each company's fundamentals instead of relying solely on higher oil prices.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Stocks to Buy
Global Partners LP: It is a leading U.S. fuel distributor and retailer, operating about 1,600 fueling locations, 290 company-run convenience stores and 54 liquid energy terminals with roughly 22.3 million barrels of storage capacity. Global Partners’ integrated business covers fuel sourcing, storage, distribution and retail operations across the Northeast, Mid-Atlantic and Gulf Coast. Because of its extensive fuel distribution and storage network, GLP is closely tied to energy prices, with higher fuel prices and market volatility often creating opportunities to benefit from favorable market conditions.
The Zacks Consensus Estimate for 2026 earnings of Global Partners indicates 113.1% growth. Over the past 60 days, the Zacks Consensus Estimate for GLP’s 2026 earnings has moved up 47.7%.
National Energy Services Reunited: It is a Houston-based oilfield services company focused mainly on the Middle East and North Africa. NESR supports drilling, production, stimulation and evaluation work, often through long-term partnerships with national oil companies. This gives National Energy Services steadier demand than short-cycle shale markets. Its cementing contracts and regional project pipeline show solid growth visibility, though geopolitical risks remain. Because its business depends on drilling and production activity, National Energy Services generally benefits when higher oil prices encourage energy companies to invest more in developing oil and gas fields.
NESR beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16%, on average. The Zacks Consensus Estimate for 2026 earnings of National Energy Services indicates 104.9% growth.
Imperial Oil: It is a Canadian energy company with operations in oil production, refining, chemicals and fuel retailing. In 2025, Imperial Oil generated $3.3 billion in net income and $6.7 billion in cash from operations, supported by solid production and high refinery use. Its Kearl and Cold Lake assets are key output drivers. IMO’s earnings can move with energy prices because oil prices, fuel demand and refining margins influence its cash flow.
The Zacks Consensus Estimate for 2026 earnings of Imperial Oil indicates 69.2% growth. Over the past 60 days, the Zacks Consensus Estimate for IMO’s 2026 earnings has moved up nearly 4%.
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