3 Energy Stocks Exposed To Geopolitical Risk Investors Should Watch

Geopolitical shocks can quickly ripple through global energy stocks, and the latest talks between President Donald Trump and Ukraine’s President Zelenskyy sit alongside rising conflict risks that keep investors on edge. Markets are weighing Ukrainian strikes on an Iranian commercial vessel, Iranian threats of retaliation, and the possibility that the Russia Ukraine and U.S. Iran conflicts start to overlap. This article explains how that backdrop could affect large, financially solid energy companies. It also highlights 3 stocks from our Global Energy Stocks screener that appear most exposed to these headlines, and why that may be relevant for your portfolio decisions.

Pakistan Petroleum (KASE:PPL)

Overview: Pakistan Petroleum is a Karachi based oil and gas producer that explores, develops, and operates fields across Pakistan and parts of the Middle East, supplying natural gas, crude oil, condensate, LPG and industrial minerals like barytes and iron ore.

Operations: Pakistan Petroleum generates around PKR 233,130.8 million in revenue from exploration, development and production of oil, gas and barytes.

Market Cap: PKR 611.3b

Pakistan Petroleum may be of interest to investors looking at energy stocks that could be influenced by heightened geopolitical risk, while trading at relatively low P/E levels compared with the Pakistan market and the wider Asian oil and gas sector. The company reports high earnings quality and a net profit margin in the mid 30% range, but faces clear trade offs, including dividend payments that are not fully covered by free cash flow. Its role in regional energy infrastructure links it closely to current conflict headlines, which can affect sentiment and pricing in different ways. Recent production additions and ongoing earnings forecasts add further context that investors may wish to understand before deciding how it could fit into a portfolio.

Pakistan Petroleum’s mid 30% net margin and low P/E hint at a story that the headline conflict risk does not fully explain. Get the full picture with the 3 key rewards and 1 important warning sign

Shanxi Lu'an Environmental Energy Development (SHSE:601699)

Overview: Shanxi Lu'an Environmental Energy Development is a China based coal producer that mines, washes, and processes coal and coke, while also developing clean coal technology and coalbed methane, and providing related services such as gas and mineral exploration, equipment leasing, and cargo transport.

Operations: Shanxi Lu'an Environmental Energy Development generates about CN¥28.1b in revenue from operations within China.

Market Cap: CN¥45.2b

Shanxi Lu'an Environmental Energy Development sits at the heart of China’s domestic coal supply, so any disruption or price shock linked to wider conflicts can quickly feed into its economics. A high P/E multiple, modest 4.2% net margin, reliance on external borrowing, and an unstable dividend record all point to meaningful downside risk if funding costs rise or one off gains reverse. With an earnings release due in August 2026 and a shareholders meeting scheduled for July, the next few months could be important for how this situation develops.

Shanxi Lu'an Environmental Energy Development’s high P/E and thin 4.2% margin hint that something in the story is getting misread. Review the 2 key rewards and 2 important warning signs and see what might be masking the real risk reward balance.

Yancoal Australia (ASX:YAL)

Overview: Yancoal Australia is a Sydney based coal producer that explores, develops and operates a portfolio of metallurgical and thermal coal mines across New South Wales, Queensland and Western Australia, selling coal into major power and steel markets in Asia, Europe and other regions.

Operations: Yancoal Australia generates most of its revenue from coal mining in New South Wales at about A$5.2b, with additional A$593m from Queensland operations and smaller contributions from freight, royalties, interest income and other activities.

Market Cap: A$7.6b

Investors watching how conflict risk feeds into global energy supply may find Yancoal Australia worth a closer look. The company is tightly linked to seaborne coal markets, with production guidance for 2026 pointing to strong operational performance. Forecast earnings growth above 20% a year contrasts with current 7.3% margins that sit well below last year’s 17.7%. At the same time, an unstable dividend record, heavy use of higher risk borrowing and a board with limited independence raise questions about how comfortably the business can handle further price or funding shocks. With management flagging volatile coal markets as governments secure fuel and LNG prices adjust to conflict headlines, the gap between those strengths and vulnerabilities is where the real story on Yancoal Australia sits.

Yancoal Australia’s earnings forecasts and production guidance suggest a story that is still unfolding, with coal market swings and funding pressures pulling in opposite directions. See how the analyst forecasts for Yancoal Australia frames that gap and where the real pressure point might sit next

The three energy stocks in this article are only a starting point, and the full Global Energy Stocks screener uncovered 38 more companies with equally compelling stories across the sector, which you can review through the Global Energy Stocks screener. Use Simply Wall St to identify and analyze the specific catalysts and narratives that matter most to you, so you can focus on the highest conviction ideas in the global energy supply chain.

Take Control of Your Investment Journey

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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