ConocoPhillips COP has operations spread across the United States, Canada, Europe, Africa, Asia-Pacific and the Middle East. COP generates revenues primarily through the exploration, production, transportation and marketing of crude oil, natural gas, natural gas liquids and bitumen. Since ConocoPhillips generates revenues from upstream operations, with crude oil contributing the largest portion of revenues, its business model is highly dependent on commodity price volatility.
Escalating geopolitical tensions in the Middle East, involving Iran, Israel and the United States, have pushed crude prices upward, creating a supportive business environment for ConocoPhillips. Rising West Texas Intermediate (‘WTI’) and Brent crude prices, fueled by the ongoing conflict, are expected to benefit COP’s earnings. With WTI prices trading above $95 per barrel and Brent crude trading higher than $105 per barrel, according to Oilprice.com, the upstream player is well-positioned to benefit from stronger realizations across its global upstream portfolio.
COP maintains a strong foothold in the Lower 48 region, primarily driven by its extensive operations in the prolific Permian Basin. This region consists of resource-rich unconventional assets across the United States, characterized by low production costs and shorter extraction times, enabling the company to generate margins even in a low commodity price environment. Leveraging its deep-rooted presence in the Lower 48 region, combined with elevated crude prices, the company continues to drive operational efficiency and position itself to deliver sustained cash flow and shareholder value.
Will FANG & XOM Gain From Elevated Crude Prices?
Similar to ConocoPhillips, Diamondback Energy, Inc. FANG and Exxon Mobil Corporation XOM have a significant presence in upstream operations, exposing their business models to crude price volatility. Diamondback Energy has a strong footprint in the Permian Basin with approximately 1,097,846 gross acres (869,036 net acres) as of Dec. 31, 2025. With high-quality, geographically diversified asset portfolios, ExxonMobil has its advantaged assets in the Permian Basin and offshore Guyana. Therefore, a strong footprint in the Permian Basin, coupled with elevated crude prices, is likely to benefit the business models of FANG and XOM.
COP’s Price Performance, Valuation & Estimates
COP shares have gained 35.2% over the past year compared with 29.1% growth of the industry.
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From a valuation standpoint, COP trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 6.58X. This is above the broader industry average of 5.43X.
The Zacks Consensus Estimate for COP's first-quarter 2026 and full-year 2026 earnings has seen upward revisions over the past seven days. Meanwhile, estimates for second-quarter 2026 earnings have remained unchanged.
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COP currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).