In 1973, the Arab oil embargo changed global markets overnight. Oil prices quadrupled. And a handful of companies found themselves sitting on assets the world desperately needed. Fast forward to today and EOG Resources Inc. (EOG) looks like a big winner, writes Nicholas Vardy, editor of The Global Guru.
Investors who understood that shift in the 1970s made fortunes. Now, the world may be facing a similar moment. Since the Iran conflict erupted at the end of February, oil prices have surged nearly 47%, pushing Brent crude above $100 per barrel. If oil averages $100 this year, analysts estimate US producers could receive a $63 billion cash-flow windfall.
EOG Resources Inc. (EOG)
But here’s the crucial point: Not all oil companies benefit equally from geopolitical shocks. Some producers are exposed to the disruption itself. Others profit from volatility. And a small group benefit from the global scramble for secure supply.
Understanding that difference is where the opportunity lies. Among US producers, EOG Resources is widely regarded as one of the most efficient operators. EOG’s wells are low-cost and highly productive. That means when oil prices rise, a large portion of the increase flows straight to free cash flow.
In a sustained $90–$100 oil environment, EOG could generate billions in excess cash — money that can fund dividends, buybacks, and disciplined production growth. Sometimes the best investment story is simply a great business in the right environment.
Recommended Action: Buy EOG.
