Middle East conflict and energy companies: The effect of air and drone strikes on global energy stocks

• We analyse the impact of recent Israel-Iran conflict on global energy markets employing event study methodology. • Considering the April 13, 2024 as an event, the top ten global energy stocks are used. Due to the non-trading day of April 13, 2024, we use the stock price of April 15, 2024 as the event date for the comprehensive analysis. • The result reveals that BP PLC stock bore the brunt of the impact with the most substantial negative abnormal return (−2.26%), followed by EOG Resources (−2.20%) and Canadian Natural Resources (−2.12%). • Additionally, both pre and post event-pushed examined stocks underscore the pervasive uncertainty surrounding the conflict. The recent April 2024 Israel-Iran conflict had a notable impact on global energy markets. Returns on the top ten global energy stocks indicate investor apprehension up to 10 days before the event started on April 13, 2024. Energy stocks had significant negative returns on the event day itself, with positive CAARs pre-event and negative CAARs post-event. The dynamic market response highlights the heightened uncertainty for energy firms due to regional instability and potential supply chain interruptions, emphasizing the critical role of geopolitical events in shaping investor sentiment and the financial performance of energy firms.