The Crude Chronicles

Value in Oil Shocks

Energy stocks typically fall in absolute terms during an oil‑driven recession but still outperform the broader S&P 500. Historical data shows a three‑month rally after a shock, a four‑month decline, and a relative bottom about seven months later. The 1973‑74 OPEC embargo exemplified uniform losses across producers, independents, and service firms. Today’s market is pricing more favorable capital conditions for energy, reflected in rising EV‑to‑invested‑capital multiples.