Oil's Record March Rally: 4 Stocks Investors Can Still Buy

Oil markets closed March with an unprecedented surge, marking the strongest monthly gain on record as global energy systems reeled under a historic supply shock. Brent crude soared nearly 60% during the month, driven by escalating geopolitical tensions and severe disruptions in the Middle Eastern supply routes. With the Strait of Hormuz largely shut and conflicts intensifying, oil prices surged past $100 and approached $120 per barrel, highlighting how fragile and sensitive global energy markets have become.

Investors looking to capitalize on this strong oil environment may consider adding Chord Energy CHRD, Drilling Tools International DTI, Magnolia Oil & Gas MGY and Vermilion Energy VET to their portfolios. These companies are well-positioned to benefit from elevated crude prices and tighter supply conditions, making them attractive plays in the current energy upcycle.

What Drove Oil’s Historic Surge

The primary driver behind oil’s record-breaking rally was a massive supply disruption stemming from the prevailing conflict involving Iran. As one of the world’s key oil-producing regions came under sustained attack, production and exports were significantly impacted. More critically, the effective closure of the Strait of Hormuz — a route that typically handles about 20% of global oil flows — created a bottleneck that sent shockwaves across global markets.

This supply crunch coincided with already tight inventories, amplifying price movements. Even strategic reserve releases by global agencies proved insufficient to offset the scale of disruption, reinforcing the upward pressure on prices.

Why Prices May Stay Elevated

While oil prices have shown some volatility amid shifting geopolitical signals, the broader outlook suggests they could remain elevated in the near term. The biggest reason is uncertainty — even if hostilities ease, restoring normal supply flows will take time. Infrastructure damage, reduced output and cautious shipping activity will likely keep supply constrained.

Additionally, global inventories have been depleted during the crisis, meaning any recovery in supply may still leave the market tight. Analysts also warn that if disruptions persist, prices could climb further, potentially testing highs seen during past energy crises.

Market Dynamics Still Favor Strength

Another key factor supporting higher prices is the expected supply-demand imbalance in the coming months. Production from major oil producers is unlikely to ramp up due to logistical and structural constraints. At the same time, demand remains relatively resilient despite higher prices, especially from developing economies.

This combination of constrained supply, recovering demand, and geopolitical risk premium creates a strong foundation for oil to remain a top-performing asset in the near term.

Conclusion: A Strong Case for Buying Now

Looking ahead, the outlook for oil remains constructive, supported by tight supply conditions and the ongoing geopolitical uncertainties. While short-term volatility may persist, the broader trend points toward sustained strength in energy markets. For investors, this creates a compelling opportunity to gain exposure to the sector. With fundamentals favoring higher prices, entering the market now could position portfolios to benefit from continued upside in the months ahead. We are currently recommending four stocks — Chord Energy, Drilling Tools International, Magnolia Oil & Gas, and Vermilion Energy — each carrying a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

4 Stocks to Buy

Chord Energy: Chord Energy is a Houston-based E&P company focused entirely on the Williston Basin. Formed in 2022, it produces crude oil, natural gas liquids and natural gas from a large, high-quality acreage position. The company is primarily oil-weighted and benefits from a deep inventory of low-cost drilling locations.

Chord follows a disciplined strategy built on efficient operations and careful capital allocation. Its strong balance sheet provides flexibility across commodity cycles, while steady free cash flow supports dividends and share buybacks. Backed by technical expertise and scale, Chord Energy aims to deliver consistent production and shareholder returns over time.

The Zacks Consensus Estimate for the company’s 2026 earnings per share indicates 26.2% year-over-year growth. Over the past 60 days, the Zacks Consensus Estimate for Chord Energy’s 2026 earnings has moved up from $4.10 per share to $12.03.

Drilling Tools International: It is a Houston-based oilfield services company specializing in downhole tools, machining, and inspection solutions for horizontal and directional drilling. With a fleet of more than 65,000 tools and technologies such as Drill-N-Ream and RotoSteer, Drilling Tools International supports well construction and optimization across major U.S. basins. Its footprint includes 16 domestic facilities and 11 international locations spanning the Middle East, Europe, and Asia, with over 90% of revenues generated in the Western Hemisphere.

Founded in 1984, DTI has expanded through acquisitions and steady investment in patented technologies, growing its portfolio from 2 to 16 patented products. The company participates in roughly 60% of North American drilling rigs and continues to scale its global reach. Drilling Tools International’s strengthened balance sheet, expanded credit capacity, and resilient free-cash-flow profile reinforce its ability to navigate fluctuating activity levels while supporting future innovation and fleet growth.

The Zacks Consensus Estimate for 2026 earnings of DTI indicates 90% growth. Over the past 60 days, the Zacks Consensus Estimate for Drilling Tools International’s 2026 earnings has moved up from 15 cents per share to 19 cents.

Magnolia Oil & Gas: It is a Houston-based E&P company with operations in South and East Texas. Its core assets lie in the Eagle Ford Shale and the Giddings area, supported by a sizable acreage position in the Austin Chalk. The company maintains a balanced production mix of oil, natural gas liquids and gas, while keeping a strong focus on oil-driven output.

Magnolia follows a disciplined approach to growth, combining steady production gains with careful capital spending. Efficient drilling, consistent operations and a stable rig program support margins and cash flow. With a strong balance sheet and low debt, Magnolia prioritizes returning cash to its shareholders through dividends and buybacks.

The Zacks Consensus Estimate for the company’s 2026 earnings per share indicates 27.9% year-over-year growth. Over the past 60 days, the Zacks Consensus Estimate for Magnolia’s 2026 earnings has moved up from $1.44 per share to $2.29.

Vermilion Energy: The company is a globally diversified producer with core assets in Canada’s Deep Basin and Montney, complemented by operations across Europe and Australia. This mix provides exposure to premium gas markets while keeping cash flows balanced and decline rates low. The company prioritizes steady production, sustainable free cash flow and disciplined capital use.

Recent updates highlight improving operations and a deep drilling inventory, though meaningful free cash flow growth is expected later in the decade. Canada now anchors production, supported by long-life assets and existing infrastructure, while European gas offers attractive economics and pricing upside. As leverage falls, Vermilion expects to increase buybacks and other return-of-capital measures over time.

The Zacks Consensus Estimate for the company’s 2026 earnings per share indicates 297.4% year-over-year growth. Over the past 60 days, the Zacks Consensus Estimate for Vermilion’s 2026 earnings has moved up from 64 cents per share to 75 cents.

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Vermilion Energy Inc. (VET): Free Stock Analysis Report

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Chord Energy Corporation (CHRD): Free Stock Analysis Report

Drilling Tools International Corp. (DTI): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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