Investment flows are shifting toward energy equities even as crude oil prices step back from recent peaks driven by geopolitical tensions in the Strait of Hormuz.
Market participants are increasingly viewing the sector as a defensive play, with analysts highlighting specific stocks that may benefit from the structural supply risks persisting in the Middle East.
The move comes after a period of sharp volatility in energy markets.
Crude prices had climbed significantly amid renewed concerns over the stability of the US-Iran ceasefire, compounding inflationary pressures.
However, prices retreated on Thursday as investors rotated out of broader risk assets ahead of a pivotal Bank of England interest-rate decision.
The pullback suggests that while immediate fears of an economic collapse have receded, the underlying supply risk premium remains embedded in energy valuations.