Energy stocks, led by the Energy Select Sector SPDR Fund (XLE), have fallen sharply since a ceasefire in the Iran conflict was announced, reversing earlier gains driven by oil prices above $100 per barrel. Analyst Ed Yardeni recommends buying the selloff, arguing that structural damage to Middle Eastern energy infrastructure and higher maritime insurance costs mean Brent crude oil will trade between $75 and $95 per barrel, above pre-war levels of $55 to $75. Bank of America and Goldman Sachs forecasts align with this view, projecting sustained higher oil prices due to ongoing supply disruptions. Despite recent declines, energy stocks remain undervalued compared to the broader market, presenting a buying opportunity if geopolitical tensions persist or escalate again.
