The Russian war on Ukraine has sparked a slew of sanctions as the Western powers seek to convince Russia to desist – and counter-sanctions, as Russia seeks to push back against the West. Russia and NATO both are reluctant to shoot at each other. But Russia has a powerful sanction weapon to fall back on, to support its war policy.
Germany, and much of Western Europe, imports most of its natural gas from Russia – and the Russian government is turning off that tap. Russian gas exports on the chief pipeline are already down to 40%, and the Russian government will be dropping it further to 20%. Ironically, Western sanctions on Russia are contributing to the cutback, as they have made it more difficult for Russia to maintain and service the pipeline.
The immediate result of this sanctions battle over gas is a surge in natural gas prices – globally. Against this backdrop, we’ve used the TipRanks database to locate two natural gas stocks that are poised to ride those price increases straight to share gains. Both are Strong Buy options, and according to Wall Street’s 5-star analysts, each has considerable upside potential. Let’s take a closer look.
The first stock we’ll look at, ConocoPhillips, is one of the biggest names in the energy sector. This $116 billion company operates in 13 countries, employs more than 9,400 people, and last year produced more than 1.5 million barrels of oil equivalent every day, leading to annual revenues of $46 billion. This year, the company is continuing to show high revenues and earnings, and is shifting its focus more toward natural gas.
On the matter of natural gas, in June, ConocoPhillips announced that it had won a stake – totaling 12.5% – in the North Field LNG expansion by QatarEnergy. The move makes ConocoPhillips the third partner in the project, and gives the company a foot in Qatar’s natural gas production, which is being ramped up as a potential substitute for Russian fuel exports to Europe.
And earlier this month, ConocoPhillips followed that announcement with the news that…