Oil Stocks Push Higher Even as War Premium Fades

Oil stocks have held their bids even as the Iran war premium drains from crude. It is a pattern that suggests something deeper than headlines is holding them up.

Options positioning on the United States Brent Oil Fund (BNO) has become more bullish since the April 22 ceasefire extension, not less so. 3 reasons explain what traders are actually pricing in.

Why Options Traders Are Betting on Oil Even as the War Premium Deflates

The bullish signal in oil stocks shows up clearest in options positioning on the United States Brent Oil Fund (BNO). It is an ETF that tracks Brent crude futures.

On March 25, as Brent traded above $105 at the peak of the Iran conflict, the BNO open interest put-call ratio sat at 0.24, meaning roughly four call options were open for every put. That was war-premium positioning, and expected.

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Then came the ceasefire extension on April 22. Much of the war risk had been priced out. If traders had been betting only on the Hormuz shock, the ratio should have drifted higher as those bets were closed.

Instead, it moved the other way. The open interest ratio dropped to 0.17, close to six calls open for every put. Daily activity tightened even more, with the volume ratio at 0.05.

Tighter bullish positioning after the war scare deflating is not how hedges behave. These traders are renewing their bets and paying up to do so, with option prices running in the top 12% of their historical levels.

That level of conviction, while the biggest short-term driver fades, says the bet is on something that lasts longer than a headline. 3 reasons explain why the options flow has stayed firm, and each line up behind a different oil stock.

Institutional Money is Flowing into ExxonMobil

The BNO signal was clearly visible in ExxonMobil (XOM).

As the war premium started to fade on April 17 with the first ceasefire announcement, XOM pulled back from its early April peak to its 100-day Exponential Moving Average (EMA), a trend line that tracks the average price of the last 100 days. The 100-day line held as support, and the stock bounced back above $149 as of April 23.

Buying volume has stayed steady through the drop and recovery, without the heavy selling of a panic exit or the rush of a speculative spike. That pattern looks like steady accumulation.

Chaikin Money Flow (CMF), an indicator that tracks whether big institutional money is flowing into or out of a stock, confirms the read.

Between April 8 and April 20, XOM slid lower while CMF moved higher, a classic sign that professional buyers were stepping in on weakness.

Wall Street sees the same thing. On April 10, right as the Iran de-escalation was gaining traction and the Hormuz premium was already starting to fade, TD Cowen analyst Jason Gabelman reiterated his Buy rating on XOM with only a small trim from $175 to $172.

The reason behind that call is simple. ExxonMobil paid its shareholders $37.2 billion in 2025, $17.2 billion in dividends, and another $20 billion in share buybacks.

Management has committed to buying back another $20 billion this year. When a company returns cash at that pace, its stock has a natural floor even as oil prices fluctuate.

A clean reclaim of $150 and push through $155, the first Fibonacci level traders are watching, opens a move toward $163.

However, a break below $141 would snap the 100-day EMA and expose $131 and $114 as deeper support zones.

Valero Stock Is Set Up Like February 3

The same war-premium deflation also tested Valero Energy (VLO), a US company whose only business is turning crude oil into gasoline, diesel, and jet fuel.

VLO pulled back from its early April peak, then quickly climbed back above its 50-day EMA and is now working to break above the 20-day EMA at $235.

Buying volume has been light through the rebound. To confirm the next leg, VLO needs a clean break above the 20-day EMA with strong volume behind it. The last time VLO did exactly that was on February 3, and since then the stock has rallied 41.65%. The broader uptrend since mid-December remains intact, with price holding above the 50-, 100-, and 200-day EMAs.

The fundamental case does not need crude to spike. Refiners make money on the gap between what they pay for crude oil and what they sell for gasoline, diesel, and jet fuel. That gap is called a crack spread.

Right now, those spreads are at all-time highs.

According to the International Energy Agency’s April 2026 Oil Market Report, global refineries will process 1 million fewer barrels per day in 2026, which keeps fuel markets tight even as crude prices settle.

Goldman Sachs reinforced the setup on April 20 ahead of Q1 earnings, naming Valero as one of three energy dividend stocks to own due to its strong refining margins and plan to return around $5 billion to shareholders in 2026.

A clean break above $237 on strong volume opens a path to $252 and $263, the next Fibonacci levels traders are watching.

However, a drop below $214 invalidates the setup and exposes the 100-day EMA at $208.

ConocoPhillips Could Break Above $126 Before Earnings

The third setup belongs to ConocoPhillips (COP). It is an oil and gas company focused solely on extracting crude oil from the ground, with most of its wells in the Texas Permian Basin and a strong international portfolio.

COP pulled back to $112 during the war-premium deflation, then climbed back above $121, the first key level. The stock trades at $122 as of April 23, up 1.95%.

Chaikin Money Flow printed at 0.09 and has pushed back above the zero line, suggesting professional investors are adding to positions rather than selling.

The COP put-call ratio tells the same story. On April 6, the ratio of puts to calls in open contracts sat at 0.75 and daily activity at 0.76.

By April 22, daily activity had compressed to 0.36 while open contracts held at 0.72. Fewer traders are betting against the stock, mirroring the pattern on BNO.

The fundamental case is simple. Oil companies around the world are spending less on finding and drilling new wells. Less drilling today means a tighter supply later.

ConocoPhillips already runs low-cost operations. Therefore, it keeps generating cash even when crude sits around $70, while the rest of the industry has to cut back.

COP reports Q1 2026 earnings on April 30 before the market opens. Zacks Investment Research has the stock on its highest rating, a Rank #1 Strong Buy, and its earnings surprise model points to a positive surprise of around 16%, suggesting the company is likely to beat analyst expectations. Zacks also projects 17.5% earnings growth for 2026.

A clean break above $126, the next key Fibonacci level, opens a path toward $135 and higher. However, a drop under $112 invalidates the setup and exposes deeper support zones.

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