The geopolitical conflicts in the Middle East have already impacted global energy markets, driving sustained increases in crude oil and natural gas prices. This situation will directly benefit energy companies such as Diamondback Energy (FANG) and Devon Energy (DVN). Given the operational dynamics of the oil market, these companies are likely to maintain strong performance throughout 2026.
It is not uncommon for geopolitical conflicts to drive up energy prices. To some extent, the current impact of the Middle East situation on commodity markets is fairly predictable. However, it is important to recognize that the end of the conflicts will not immediately restore the already disrupted global energy supply.
Damaged or even destroyed energy infrastructure may take months or even years to return to operation. The period of high oil prices could last longer than investors expect. This is bad news for ordinary consumers’ wallets, but good news for energy companies like Diamondback and Devon. Both companies are expected to see significantly improved profitability in 2026.
Aggressive Bet on High Oil Prices
Diamondback Energy and Devon Energy are both onshore oil and gas producers in the United States. Their production assets have not been affected by the geopolitical conflicts in the Middle East, meaning they can fully benefit from rising energy prices.
Diamondback achieved a 9% increase in oil production per share in 2025 and expects this metric to grow another 4% in 2026. As U.S. benchmark crude West Texas Intermediate (WTI) prices rise in tandem with the international benchmark Brent crude prices, the company has laid the groundwork for strong earnings.
The situation for Devon Energy is slightly different. While benefiting from rising oil and gas prices, the company recently agreed to acquire competitor Coterra Energy (CTRA). The transaction is expected to close in the second quarter of 2026 and was agreed upon before the current significant rise in oil prices. Once the acquisition is completed, when Devon updates its full-year outlook, the positive impact of this deal may exceed initial expectations.
The issue for these two companies is that they are pure-play producers, meaning their businesses are fully exposed to the downside risk when energy prices fall. Given that energy prices have already risen and high oil prices are likely to persist, Diamondback and Devon are well-positioned to outperform the broader market in 2026.
