JPMorgan Calls For Calm Amid Crude Spike, Flags 3 Energy Stocks With Upto 35% Upside

Oil may have spiked on Middle East tensions, but JPMorgan is keeping its cool — and its crude forecast in check.

In its latest note, the firm reiterates a base case for Brent in the low-to-mid $60s through 2025 and flat at $60 in 2026, brushing aside geopolitical fears as largely priced in.

In fact, JPM pegs Brent’s fair value at $66, suggesting the commodity sports a $10/bbl geopolitical premium when tensions escalate.

Why JPMorgan Isn't Buying The Oil Rally

JPMorgan has three reasons to stay calm:

• First, an all-out attack on Iran could push oil to $120 and U.S. inflation to 5% – but the bank sees just a 7% chance of that happening.
• Second, the closure of the Strait of Hormuz – though a nightmare scenario for oil – would be economic self-sabotage for Iran, which sells most of its crude to China.
• Third, the Gulf nations simply can't afford a war right now; economic diversification plans like Saudi's Vision 2030 require peace, not petroleum-fueled chaos.

Read Also: Exxon Mobil, Chevron, Occidental Petroleum In Focus As Expert Says ‘US Economy Is Far Less Sensitive To An Oil Shock’ Amid Israel-Iran Conflict

3 Energy Stock Picks With Good Upside

But for stock pickers, here's where it gets interesting: JPMorgan analysts also ran an $80 WTI upside case to identify E&Ps with the most leverage to higher oil—and the results are eye-popping.

Leading the charge?

• Civitas Resources Inc (NYSE:CIVI): 35% upside to $45
• SM Energy Co (NYSE:SM): 24% upside to $35
• Talos Energy Inc (NYSE:TALO): 18% upside to $11

These aren't just headline-grabbing gains. In the $80 WTI scenario, these names are expected to post industry-leading FCF-to-enterprise value yields — with Talos hitting 40.7%, SM at 37.1%, and Civitas at 31.2% in 2027, per JPMorgan’s estimates.

Even with muted oil outlook, these companies stand out for their capital efficiency and torque to price moves. If oil does break higher — or simply stays more resilient than feared – these small-to-mid-cap E&Ps could handily outperform.

JPMorgan may not be bullish on crude, but it's still spotting high-conviction upside in energy equities. Investors willing to stomach the volatility might find more bang for their buck in these overlooked oil stocks.

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