Texas oil producers benefit as geopolitical tensions push crude prices to multi-year highs

Geopolitical conflict involving the U.S., Israel, and Iran has disrupted global oil supply by effectively closing the Strait of Hormuz, removing about 12 million barrels per day from the market. This supply crunch has driven Brent crude prices to $119.50 per barrel, the highest since 2022, raising concerns about global inflation. In response, investors are focusing on domestic oil exploration and production companies, particularly in Texas, which have seen significant profit margin expansion. The Texas Oil Index ETF (OILT) has outperformed broader energy funds with a 42.5% year-to-date return, highlighting the advantage of Texas-based producers amid global supply disruptions.