TLDR
- Iran-US conflict intensifies after reported death of Supreme Leader Khamenei in US-Israeli strikes, sending markets into rotation mode.
- Crude oil prices are near seven-month highs, with analysts predicting potential spikes of $10 or more.
- Energy stocks like BP and Chord Energy offer direct exposure to rising oil prices with strong dividends.
- Defense contractors Lockheed Martin and Northrop Grumman are seeing surging demand for missile defense and stealth programs.
- Eos Energy is a high-risk, long-term play on energy security and grid resilience driven by war-related policy shifts.
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The reported death of Iranian Supreme Leader Ayatollah Ali Khamenei following US-Israeli strikes has rattled global markets. Investors are now moving fast to reposition portfolios toward sectors that historically perform in wartime.
Crude oil is already trading near seven-month highs. Defense budgets are expected to grow, and energy security is back at the top of the policy agenda.
Here is a look at five stocks analysts are watching closely right now.
Energy Stocks: Riding the Oil Price Spike
BP (BP)
BP is a UK-based energy company with operations spanning oil, gas, refining, and renewables. It has a global reach that makes it resilient when crude prices rise.
BP p.l.c., BP
With Brent crude near seven-month highs, BP’s trading desk and refining margins are expected to widen. The stock yields over 5% and trades at a forward P/E under 9x.
BP completed $2.5 billion in buybacks in Q4 and has a progressive dividend policy with 4% annual growth guidance. Analysts at Fidelity highlight its income appeal in a war-premium environment.
Chord Energy (CHRD)
Chord Energy operates in the Williston Basin, focusing on the Middle Bakken and Three Forks formations. It produces around 232,737 barrels of oil equivalent per day.
Chord Energy Corporation, CHRD
The company sells crude, NGLs, and gas via pipelines and rail, giving it direct exposure to WTI price rallies. It returned $1.2 billion to shareholders in 2025 and trades at a forward P/E of around 6x.
Chord yields approximately 4.9% to 5% and has a dividend growth rate of over 20% annually. Analysts at Koyfin and Simply Wall St. rate it a high-conviction buy for cyclical upside.
Eos Energy Enterprises (EOSE)
Eos Energy makes grid-scale batteries in the US. Its shares dropped sharply after Q4 results despite a 700% year-over-year revenue surge and record quarterly sales.
The company exited 2025 with around 2 GWh of annualised production capacity and over $240 million in bookings. It holds more than $600 million in cash.
Eos is not a defensive war stock. It is a high-risk, long-duration bet on energy security policy accelerating if governments prioritize grid resilience in response to conflict.
Defense Stocks: Missiles, Bombers, and Bulging Backlogs
Lockheed Martin (LMT)
Lockheed Martin is the world’s largest pure-play defense contractor. It recently secured a $9.8 billion contract for 1,970 Patriot PAC-3 Missile Segment Enhancement interceptors, the largest in its Missiles and Fire Control history.
Iran’s ballistic missile advancements have driven demand for systems like Patriot and THAAD, feeding directly into Lockheed’s order book. J.P. Morgan maintains an overweight rating with price targets between $200 and $500.
The stock offers a dividend yield of around 1.5%. Its $194 billion backlog includes F-35 sustainment and Patriot systems now in active demand.
Northrop Grumman (NOC)
Northrop Grumman leads on the B-21 Raider stealth bomber and the Sentinel intercontinental ballistic missile program. Both align with Pentagon priorities as Iran-related threats grow.
Morgan Stanley rates it overweight with a $408 price target, with shares recently trading around $347. The stock is up over 33% in the past year and offers a 1.5% dividend yield.
Major 2026 contract awards are expected across B-21, F/A-XX, and Golden Dome projects. Northrop has outperformed the S&P 500 over the past 12 months.
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