Since the start of 2026, volatility in the global energy market has drawn widespread attention from investors. As one of the largest oil companies in the world, Exxon Mobil (XOM) has seen particularly outstanding stock performance. As of the time of writing, the company’s stock price has risen by a cumulative 24%, compared to a gain of just 10% for the S&P 500 over the same period. Although it is impossible to predict the future with precision, based on the fundamentals of the oil market, even if the Middle East conflict ends, oil prices are likely to remain high, which is expected to support a strong performance in Exxon Mobil’s stock. Unless the S&P 500 experiences a significant surge later on, Exxon Mobil is likely to emerge as the ultimate winner for the full year of 2026.
Over the long term, Wall Street has demonstrated robust performance in value discovery, but in the short term, sentiment often becomes the dominant force in the market, leading to excessive price fluctuations. Take NuScale Power (SMR) as an example. This loss-making nuclear power startup is striving to enter the electricity industry using new technologies. Its planned small modular reactor (SMR) technology is promising, yet the company has not built a single sellable unit to date. Nevertheless, the company’s stock price soared dramatically based solely on investor enthusiasm, only to plummet sharply when Wall Street’s interest waned. During this period, the company’s fundamentals did not change materially, and the stock’s volatility was primarily driven by sentiment.
Currently, Exxon Mobil is also benefiting from investor optimism, but this enthusiasm is closely tied to real-world events—specifically, geopolitical conflict in the Middle East. Supply disruptions caused by the conflict have left the world facing shortages of oil and natural gas. As a commodity, restricted supply directly drives up energy prices, which in turn prompts investors to buy shares of global energy giants like Exxon Mobil, in anticipation of strong financial performance.
While this logic is not unreasonable, once the Middle East conflict ends and oil prices retreat, Exxon Mobil’s stock price is also likely to fall. However, the issue is that the global oil market is complex and interconnected. Energy industry executives have warned that the current supply shortage has not yet been fully reflected in oil prices, and it may take several months for the industry to return to normalcy.
All things considered, Exxon Mobil has already established a significant lead over the S&P 500. As time goes on, the global energy gap is widening, and the time needed to restore normalcy is lengthening. Although investor sentiment may trigger a short-lived drop in oil prices after the conflict ends, when industry fundamentals come into play, oil and gas prices are likely to rise again or at least remain elevated. This suggests that Exxon Mobil’s stock price is expected to stay at high levels throughout the year, while the S&P 500 would need a substantial rally to close the gap.
