West Texas Intermediate (WTI) crude oil (CLJ26) surged more than 8% to an 8.5‑month high on March 3, while Brent crude jumped to its highest level since mid‑2025 after an advisor to Iran's Islamic Revolutionary Guard Corps commander said that Iran would "set fire to any ship attempting to pass through" the Strait of Hormuz. The strait, which runs along Iran's coast and handles roughly a fifth of the world's daily oil supply, has seen tanker traffic effectively grind to a halt since the U.S. and Israel launched joint military strikes on Iran this past week.
The impact is already showing up across the global energy system. Iranian drone attacks forced Saudi Arabia to shut its Ras Tanura refinery, while debris from an intercepted drone triggered a fire at Fujairah in the United Arab Emirates (UAE), one of the largest oil storage hubs in the Middle East. Iraq, OPEC's second‑biggest producer, has had to shut production at its largest oil fields in Rumalia as storage tanks fill with no export route available.
JPMorgan has warned that if this conflict leads to a prolonged closure of the strait, Brent crude could jump to $120 to $130 dollars per barrel. Energy stocks are already reacting, and three names currently stand out as the top‑rated oil‑linked plays among Wall Street analysts: Diamondback Energy (FANG), Sunoco LP (SUN), and Viper Energy (VNOM).
What makes each of these names uniquely positioned to benefit if Brent crude does rocket toward $120, and are any of them still undervalued at today's prices? Let’s find out.
Oil Stock #1: Diamondback Energy (FANG)
Diamondback Energy is a pure-play Permian Basin operator focused on horizontal drilling and development in the Midland and Delaware basins. Over the past 52 weeks, FANG shares have climbed nearly 30%, while year-to-date (YTD) the stock is up roughly 21%, reflecting growing confidence in Diamondback's assets and cash flow.
With a forward price-to-earnings (P/E) multiple of about 19 times versus a sector average near 16.9 times, FANG stock trades at a modest premium that lines up with its scale and solid balance sheet.
On the numbers front, Diamondback’s fourth-quarter 2025 results showed this strength clearly, with average production of 134,000 barrels of oil equivalent perday (boe/d) and adjusted net income of $121 million. The company declared a total quarterly dividend of $0.52 per Class A share, implying a 4.6% annualized yield at recent prices, alongside $94 million in share repurchases. For the full year, adjusted EBITDA reached $1.3 billion and proved reserves rose 107% year-over-year (YOY) to 406,035 Mboe, pointing to both higher output and better reserve depth.
At the strategic level, management has been reshaping the portfolio. The company's royalty subsidiary Viper Energy recently closed the acquisition of Sitio Royalties, significantly expanding its mineral and royalty position in the Permian. Meanwhile, Diamondback monetized water infrastructure by selling Environmental Disposal Systems to Deep Blue for about $695 million upfront plus potential earnouts, unlocking value from non-core assets and sharpening its focus on core shale development.
Analysts remain highly positive on FANG stock, with around 32 analysts assigning an overall “Strong Buy” rating and an average target near $184.87, implying roughly 3% potential upside from recent price levels.
Oil Stock #2: Sunoco LP (SUN)
Sunoco LP is a fuel distribution and midstream partnership that generates steady cash flows by transporting, storing, and marketing gasoline, diesel, and other refined products. Over the last 52 weeks, SUN is up 12%, with much stronger momentum in 2026 as shares have gained 23% YTD.
SUN trades at a forward P/E of 10.2 times versus about 16.9 times for the broader energy sector. That suggests the market still prices it at a discount even after the step-up in scale and diversification.
In Q4 2025, adjusted EBITDA rose to $646 million from $439 million a year earlier, and distributable cash flow increased to $442 million from $261 million. That was helped by the Fuel Distribution segment’s $332 million of EBITDA on 3.3 billion gallons sold at a $0.177 per-gallon margin, along with steady contributions from pipelines, terminals, and the new refining segment. For full-year 2025, adjusted EBITDA increased to $2.05 billion from $1.46 billion while distributable cash flow climbed to $1.38 billion from $1.08 billion, even though net income slipped to $527 million because of transaction and integration costs.
On the strategic side, the $9.1 billion cash-and-stock acquisition of Parkland Corporation, which closed on Oct. 31, 2025, is the main driver of this shift. The deal broadened Sunoco’s retail, wholesale, terminal, and refining footprint across Canada and the U.S., left SunocoCorp (SUNC) holding roughly 27% of outstanding common units, and supports guidance for about $125 million in Parkland cost and commercial synergies, a 50-day turnaround at the Burnaby refinery, the TanQuid terminal acquisition in early 2026, and at least $500 million of bolt-on deals per year funded by more than $600 million of growth capex.
Analysts are very optimistic about SUN’s outlook, with seven analysts surveyed assigning a consensus “Strong Buy” rating and an average price target of $66.33. That target implies about 3% potential upside from recent levels.
Oil Stock #3: Viper Energy (VNOM)
Viper Energy is a Permian-focused mineral and royalty company majority-owned by Diamondback Energy, collecting royalty income from oil and gas production instead of spending capital to drill its own wells. Over the past 52 weeks VNOM stock is up nearly 7%, while shares up 14% YTD.
VNOM stock trades at about 36.1 times forward earnings versus roughly 16.9 times for the sector, a premium that reflects the appeal of its capital-light model and direct link to Permian volumes.
In Q4 2025, Viper averaged 66,413 barrels of oil per day (134,000 boe/d). Despite a consolidated net loss of $246 million, Viper delivered $121 million of consolidated adjusted net income, or $0.72 per share, as well as $145 million of cash available for distribution, or $0.85 per share. For full-year 2025, production averaged 48,973 bo/d (95,126 boe/d), consolidated adjusted EBITDA reached $1.3 billion, dividends totaled $2.20 per share, buybacks were about $194 million, and proved reserves doubled to 406,035 Mboe, up 107% YOY with oil volumes up 106%.
On the strategic side, as mentioned earlier, Viper has completed its all-equity acquisition of Sitio Royalties, which increased its scale and Permian exposure and led management to raise Q3 2025 production guidance by 8,500 bo/d at the midpoint. Meanwhile, a separate $670 million deal to sell non-Permian assets to affiliates of GRP Energy Capital and Warwick Capital Partners, taking roughly 4,500 to 5,000 bo/d (9,000 to 10,000 boe/d), will further concentrate the company's portfolio in the Midland and Delaware Basins and free up capital to cut debt and reinvest in higher-margin Permian minerals.
All 19 analysts surveyed assign VNOM stock a consensus “Strong Buy” rating and an average price target of $51.05. That implies roughly 16% potential upside from recent levels.
Conclusion
In a market this volatile, nobody can say with certainty how long the Strait of Hormuz shock will last or whether Brent actually tags $120, but the setup clearly leans in favor of energy bulls. If the risk premium in crude stays elevated, FANG, SUN and VNOM all have more room to run, with Viper offering the most torque to sustained strength in Brent and Diamondback and Sunoco LP pairing upside with sturdier cash flow. Near term, pullbacks are likely to be more about headline fatigue than broken fundamentals, which makes any meaningful dip in these three names look buyable.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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