Iran, War and the Oil Price Surge: 3 ASX Oil Stocks to Watch

Three significant opportunities are emerging on the ASX as geopolitical tensions send the oil price surging. War has broken out involving Iran, oil has taken off, and the big question for investors is whether this is just the beginning and how to position for what comes next.

In this episode of Wealth Within's Hot Stock Tips Show, senior analyst Pedro Banales and host Filip Tortevski break down the oil price outlook and analyse three ASX oil stocks that could benefit from the current environment. If you are new to investing and want to understand the fundamentals before diving into sector-specific opportunities, our guide on the Stock Market for Beginners is an excellent starting point.

Why Oil Prices Are Surging Right Now

Oil prices are driven by supply and demand, but they are equally driven by geopolitical risk. The current Iran conflict has pushed the market firmly into risk-on territory, with crude oil bouncing sharply from levels around fifty-nine dollars to above seventy-six dollars in a matter of days.

To understand the potential scale of this move, you only need to look back to the post-2001 period and the massive run oil experienced during the war on terror following September 11. When conflict extends over a prolonged period, the impact on energy prices can be dramatic and sustained.

The critical factor right now is whether the Iran situation escalates into a prolonged conflict or resolves as a short operation. The Strait of Hormuz, one of the world's most important oil chokepoints, is already causing disruption. Commercial ships are diverting around the Cape of Good Hope in South Africa to avoid the risk of missile strikes, which increases insurance costs, extends lead times, and raises fuel expenses for shipping companies.

The real concern for markets is the possibility that key Iranian oil export infrastructure, such as Kharg Island, could be targeted. If that supply comes offline, the impact on global oil prices would be significant.

From a technical perspective, oil has broken through a key level of resistance around $69 and is now approaching the $76 region, which represents a critical midpoint in the broader trading range. If the conflict persists, oil could realistically push toward eighty-four to eighty-five dollars, and in a more extreme scenario, levels around ninety-eight dollars are not out of the question given historical price agreement in that zone from the 2011 period.

The upper ceiling for oil appears to be around one hundred and nine dollars, meaning there is potentially 50 per cent or more upside from current levels if geopolitical tensions escalate further.

Horizon Oil: A Clean Uptrend with Takeover Momentum

Horizon Oil has delivered major news with the launch of a takeover bid for another company, offering cash plus shares in a deal that values the target at a ten per cent premium. Horizon already owns nearly twenty per cent and believes combining the two businesses could unlock around two million dollars per year in synergies while creating a larger, more diversified oil and gas group.

With oil prices trending higher, scale matters because stronger pricing boosts cash flow and makes consolidation more attractive.

From a technical standpoint, Horizon Oil is in a beautiful and uniform uptrend. The stock has just broken through a short-term area of resistance around twenty cents, which had been capping the price. What makes this trend particularly encouraging is the way the stock is rising compared to its historical behaviour.

In previous cycles, such as 1986, 1996, and 2006, the stock experienced sharp euphoric spikes that were sentiment-driven and unsustainable. The current move is much smoother and more measured, which typically indicates a genuine trend rather than speculative froth.

With the stock now through that significant historical hurdle, the next target sits around forty-four to forty-five cents, representing a potential doubling in price. Fundamentally, Horizon also has a project in China, which is particularly relevant given that China has been one of the largest buyers of Iranian oil at discounted prices. If Iran's supply comes offline, China will need alternative sources, and Horizon could be well-positioned to benefit from that shift.

One important consideration is liquidity. Horizon Oil is a more illiquid stock, which means it can move very quickly when momentum builds, but it also means investors need to be mindful of whether they can get in and out at the prices they want. Expect increased volatility in the twenty-eight to forty-five cent range based on historical price activity in that zone.

Viva Energy: A Refiner at a Potential Reversal Point

Viva Energy sits in an interesting part of the oil value chain as a major refiner rather than an explorer. It provides fuel to Australian consumers, which means rising oil prices are passed through to end users, supporting the company's margins. What caught the team's attention was the technical picture, which is beginning to tell a compelling reversal story.

On the weekly chart, Viva Energy trends nicely and suits both active traders and longer-term investors. Someone who bought around one dollar fifty in 2020 and exited near the 2024 highs would have achieved approximately one hundred and twenty-five per cent appreciation over four years. The stock also provides dividend income along the way, which adds to its appeal for income-focused investors.

After a significant sell-off, the stock appears to have found support around one dollar seventy, with an upper band of resistance at approximately two dollars twenty. What makes this setup particularly interesting is the character change in price behaviour. The stock has made two attempts to push lower, and buyers have stepped in both times, establishing higher bases. This is a classic signal that selling pressure is exhausting and momentum may be shifting.

If Viva Energy can push back to $2.20, that represents roughly a 20 per cent upside from current levels. With a stop-loss placed below one dollar seventy, the downside risk is approximately nine per cent, creating a favourable risk-to-reward ratio. The stock also sits at an attractive price-to-earnings level and pays dividends, making it a well-rounded opportunity for those looking at the oil space from a different angle. These are the kinds of setups that traders learn to identify and act on with confidence through a structured education. Many of our clients begin building these skills with the Short Course in Share Trading, which covers trend analysis, entry and exit techniques, and money management rules.

Omega Oil and Gas: A Small-Cap with Big Potential

Omega Oil and Gas is an Australian oil company with a project in the Taroom Trough in Queensland. What makes it particularly attractive is that the infrastructure is already in place and it sits on one of the largest oil reserves in the country. It could also become a significant exporter to the Asia region, positioning it as a risk-off alternative compared to Middle Eastern supply.

The stock listed in 2022 and, unlike many small-cap resources stocks, it did not experience a dramatic post-listing crash. Instead, it traded sideways around thirteen cents for approximately two years, building a solid base before establishing a series of higher bases and higher highs. There was a pullback in March 2025 that appeared to be driven by broader market weakness rather than company-specific issues, and the stock has since resumed its uptrend.

At around fifty-seven cents, Omega is attracting increasing volume on upward moves, which provides an important signal about institutional interest. When you see significant spikes in buying volume accompanying price increases, it suggests the larger end of town is accumulating the stock. That said, with around eleven million shares traded during peak volume days, this remains a relatively small and illiquid stock. You would not need a large fund to move the price meaningfully, which cuts both ways for investors.

The main risk to consider is that the current momentum is slightly more vertical than the previous trend, which means there is a possibility of a pullback to re-establish the prior trend angle before the next leg higher. Understanding how to assess these momentum shifts and manage position sizes accordingly is a critical skill.

For those who have already built solid foundations and want to refine their ability to time entries and exits with greater precision, the Advanced stock trading course teaches techniques such as time analysis and Elliott Wave analysis to significantly enhance profitability.

How to Approach Oil Stocks as a Trader

One of the key takeaways from this analysis is the importance of filtering stocks both technically and fundamentally before committing capital. When a chart catches your eye technically, the next step is to understand the company's fundamentals and how it fits within the broader market context. In this case, the Iran conflict provides a clear catalyst, but the technical setups on each stock tell you whether the opportunity is actionable and where the risk lies.

It is also worth noting that each of these three stocks suits a different type of investor. Horizon Oil is a momentum play with takeover upside in a trending market. Viva Energy appeals to those looking for a potential reversal with income through dividends. Omega Oil and Gas offers early-stage small-cap exposure with strong volume signals. Matching a stock to your personality and trading style is an often-overlooked aspect of successful investing that separates consistently profitable traders from those who struggle.

Another crucial point raised in the analysis is the importance of identifying when the market is telling you it does not want to go lower. Multiple tests of support where buyers step in at progressively higher levels is one of the most reliable signals that a reversal is underway.

Learning to read these signals with confidence and having the money management rules in place if the trade goes the other way, is what allows traders to hold positions longer and capture larger moves. These are the competencies taught in detail through the Diploma of Share Trading and Investment, which covers everything from trend analysis and pattern recognition to risk management and portfolio construction.

The Bigger Picture for Oil and Your Portfolio

While the Iran conflict is the immediate catalyst driving oil prices higher, the broader setup has been building for months. Oil had been in a long-term downtrend since 2022, making it one of the worst-performing commodities due to oversupply issues. The current geopolitical shock is arriving at a time when prices were already at historically low levels, near the bottom of a well-established trading range. This combination of depressed prices and a sudden supply disruption creates the conditions for potentially significant upside.

For Australian investors, the opportunity extends beyond just the oil price itself. ASX-listed oil companies that produce domestically or have exposure to Asian markets may benefit disproportionately if Middle Eastern supply is disrupted and regional buyers seek alternative sources. The three stocks analysed in this episode represent different ways to gain exposure to this theme while managing risk appropriately.

To see how our analysts apply these techniques to real stocks every week, tune into our Hot Stock Tips videos streamed every Monday evening, where we break down the latest market moves and answer your questions in real time.

Invest in Your Trading Education

The oil market is presenting compelling opportunities right now, but capitalising on them requires the skills to read charts, assess risk, and execute with discipline. Whether you are drawn to trending momentum plays like Horizon Oil, reversal setups like Viva Energy, or emerging small-cap opportunities like Omega Oil and Gas, the principles of successful trading remain the same: identify the trend, confirm the setup, manage your risk, and let the market tell you when to act.

If you are serious about developing these skills and trading with more certainty, the team at Wealth Within has the experience and resources to support you. With over 24 years in business, a 4.9-star rating across more than 739 reviews, and the only government-accredited share trading education in Australia, Wealth Within is the trusted name in trading education.

To learn more about Wealth Within and how our courses can equip you with the knowledge and strategies to trade profitably in any market condition, call 1300 858 272 or email the team. The right education will pay you back many times over.