As the US and Israel launched airstrikes on targets in Iran and Lebanon over the past few days, and Iran retaliated with missile attacks on Israel and Gulf states, the death toll has climbed into the hundreds. While global diplomacy is racing to contain the crisis, certain defence contractors and energy companies have emerged as early beneficiaries on international markets.
Lockheed Martin, the world’s largest defence contractor by revenue, reached a record high on Monday, closing at $676.70 after rising more than 4%. Its F-35 fighter jets, precision munitions, and radar systems are playing a key role in the ongoing operations. Other US defence firms also gained sharply, with Northrop Grumman up 6%, RTX rising nearly 5%, and L3Harris Technologies and General Dynamics posting solid gains. Data-analytics firm Palantir Technologies, which supports intelligence operations, jumped almost 6%.
European defence companies saw more modest increases. Germany’s Renk and Italy’s Leonardo rose as investors anticipated potential growth in NATO procurement and export contracts. Analysts said the conflict could accelerate already planned defence budgets in Washington and European capitals, especially as the military campaign is expected to continue for several weeks.
The gains in defence stocks contrast with broader market declines, as the geopolitical crisis has spurred risk-off behaviour in equities. Energy companies have been another standout, benefiting from disruptions to global oil and gas supplies.
Iranian retaliatory strikes included attacks on facilities in Saudi Arabia and Qatar, and threats to close the Strait of Hormuz, a critical shipping lane that carries roughly 20% of the world’s seaborne oil. Brent crude surged past $85 per barrel, its highest level since 2024, while West Texas Intermediate traded around $76.
Major oil producers also recorded sharp gains. ExxonMobil climbed over 4% to a record high, while Chevron, Occidental Petroleum, and ConocoPhillips posted comparable rises. European oil firms, including Shell and TotalEnergies, advanced in line with the global price surge.
The conflict has also disrupted liquefied natural gas (LNG) production. QatarEnergy announced a halt to output at its Ras Laffan and Mesaieed facilities following Iranian drone strikes. European benchmark TTF gas prices jumped more than 50% to €62 per megawatt hour by Tuesday. LNG exporters including Cheniere Energy, Venture Global, and Woodside Energy experienced intraday gains as traders reacted to potential supply shortages. Analysts cautioned that rerouting LNG would take time due to shipping and contractual constraints, leaving markets highly sensitive to geopolitical developments.
The European Commission said it is monitoring energy prices and supplies closely. It will convene an Energy Task Force this week with Member States and coordinate with the International Energy Agency to assess the situation.
As the conflict enters its fourth day, defence and energy markets remain volatile, reflecting expectations of sustained military activity and ongoing threats to global energy flows.
