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    Diamondback Energy, APA Corporation, SM Energy, Kosmos Energy, and CNX Resources Shares Are Soaring, What You Need To Know

    Barchart·07/29/2026 12:50:11
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    What Happened?

    A number of stocks jumped in the afternoon session after renewed fighting across the Middle East, and a larger-than-expected drop in U.S. crude stockpiles reinforced concerns over oil supply. 

    Crude oil futures jumped more than 6%—snapping a three-day losing streak—as renewed fighting across the Middle East and a larger-than-expected drop in U.S. crude stockpiles reinforced concerns over a global supply squeeze. 

    The primary driver of the rally was the collapse of a four-day truce, marked by escalating hostilities between Iran and the U.S. Iran carried out a missile attack on a U.S. base and fired on tankers in the Strait of Hormuz, a critical chokepoint for global energy supplies. In response, U.S. and Saudi Arabian forces launched retaliatory strikes on Iran-aligned militias in Iraq. These developments revived fears of a wider regional conflict that could severely disrupt the flow of oil, sending Brent crude futures above $90 a barrel and West Texas Intermediate (WTI) climbing past $84 a barrel. 

    Adding fundamental support to this geopolitical rally, a report from the American Petroleum Institute (API) highlighted continued tightness in the domestic market. The API estimated that commercial crude oil inventories in the United States fell by 3.3 million barrels in the week ending July 24. A decrease in these stockpiles typically signals that demand is outpacing supply, putting upward pressure on prices. If confirmed by official government data, this draw would leave U.S. crude stockpiles at their lowest level for this time of year since 2018, providing a powerful dual tailwind for the energy sector alongside the Middle East tensions.

    The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

    Among others, the following stocks were impacted:

    Zooming In On SM Energy (SM)

    SM Energy’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

    The previous big move we wrote about was 16 days ago when the stock gained 5.9% on the news that the U.S. launched a new wave of military strikes against Iranian targets, as President Donald Trump announced a 20% U.S. toll on cargo transiting the Strait of Hormuz. After Iran declared the Strait of Hormuz closed "until further notice" over the weekend, President Trump stated the U.S. will reimpose a blockade on Iranian ports and act as the waterway's "guardian." To fund this security, the U.S. will immediately begin charging a 20% fee on all cargo shipped through the strait. The escalation reverses a recent decline in oil prices that followed OPEC+'s decision to raise production, reinserting geopolitical risk into the energy market. The Strait of Hormuz normally carries about a fifth of global crude and liquefied natural gas supplies. While the physical flow of oil has not been fully halted, the threat of a prolonged disruption directly lifts the revenue outlook for U.S. domestic producers and international majors by raising the baseline price of their reserves. Exploration and production companies with high leverage to crude prices saw steeper gains than diversified majors, reflecting their direct exposure to spot prices. However, the rally's durability depends on whether actual supply is curtailed; if the strait remains navigable, the geopolitical premium could quickly recede.

    SM Energy is up 64% since the beginning of the year, but at $31.38 per share, it is still trading 9.9% below its 52-week high of $34.81 from May 2026. Investors who bought $1,000 worth of SM Energy’s shares 5 years ago would now be looking at an investment worth $1,694.

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