Energy Insiders Buy Stocks Despite Potential Peace Deal Threatening Oil Prices

While a swift resolution to the conflict in Iran could trigger a sharp decline in oil prices and energy sector valuations, insiders at numerous energy companies are aggressively buying their own stocks. This market behavior suggests a strong conviction among corporate leadership that share prices will continue to climb rather than retreat.

Over the past several months, as both crude prices and energy equities rose, insiders at more than 35 energy firms have invested approximately $55 million into their companies. Notable purchases include Matador Resources, where the CEO and CFO acquired over $1.5 million in stock, and Vitesse Energy, where a director bought $1.6 million worth of shares. Additionally, the CEO of refiner HF Sinclair purchased $1.3 million in stock in mid-August.

Although these purchases have primarily occurred at smaller energy producers rather than industry giants like Chevron or ExxonMobil, historical data spanning two decades indicates that such sector-wide insider buying is a significant bullish indicator.

Experts suggest three primary reasons for this disconnect between market sentiment and insider action. First, many analysts believe a floor has formed for energy prices. Rob Thummel, who helps manage the Tortoise Energy Fund, anticipates that while the war may conclude after U.S. midterm elections, West Texas Intermediate (WTI) crude will stabilize around $75 per barrel—approximately $10 above pre-war levels. This increase reflects sustained geopolitical risk premiums and the need for countries to rebuild oil inventories. The International Energy Agency has also revised its timeline for normalized Middle East energy flows to 2027.

Thummel noted that energy companies can generate solid returns on capital with oil priced at $75. Meanwhile, Ben Cook, manager of the Hennessy Midstream Fund, argues that prices could spike to $120 or $130 if the conflict intensifies, given that neither side appears eager to de-escalate and President Donald Trump remains focused on Iranian denuclearization.

The second factor is the anticipated surge in energy production outside the Middle East. Bob Robotti of Robotti & Co. Advisors highlighted a global shift toward securing international offshore oil supplies to mitigate regional instability. This trend benefits companies like Subsea 7 SA, which assists with offshore development, and has accelerated drilling contracts for firms like Tetra Technologies, particularly in the North Sea, Brazil, and the U.S. coast.

Robotti also pointed to increased interest in Canadian energy assets, citing Shell’s recent acquisition of ARC Resources as evidence of Canada’s appeal as a stable supplier. Within the U.S., midstream companies like Expand Energy and Williams Cos. are seen as relative winners due to the perceived safety of American supply chains.

Finally, energy stocks, particularly in the small- and mid-cap segments, appear undervalued relative to other market sectors. Ben Messier of Vitesse Energy noted that these companies often trade at enterprise-value-to-EBITDA multiples of four or five, with free-cash-flow yields ranging from 10% to 15%. Since the outbreak of war on February 28, the State Street SPDR S&P Oil & Gas Exploration and Production ETF has risen 30%, lagging behind the 55% advance in WTI crude prices. William Blair analyst Neal Dingmann has recommended maintaining overweight positions in the group, citing these attractive valuation metrics.

Other companies reporting strong insider buying activity include Energy Transfer, Mammoth Energy Services, Infinity Natural Resources, Northern Oil and Gas, Solaris Energy Infrastructure, and Alpha Metallurgical Resources.