S&P/ASX 200 Energy Index (ASX: XEJ) shares are up 0.4% while the benchmark S&P/ASX 200 Index (ASX: XJO) is up 0.7% on Tuesday.
ASX 200 energy shares have skyrocketed 14% over the past month due to a huge spike in oil and gas prices caused by the conflict in Iran.
The conflict has effectively closed the Strait of Hormuz, through which about 20% of the world's oil and gas supplies are shipped.
Some Middle East oil and gas producers have been forced to cease production as storage tanks fill up and tankers in the Strait sit still.
After Yemen joined the fighting over the weekend, passage of oil and gas via the Red Sea and the Strait of Bab al-Mandeb is also at risk.
The world is grappling with the ensuing oil shock, which has sent Brent Crude 39% higher over 30 days to US$107.70 per barrel today.
Gas prices are also substantially higher. European gas prices are up 24%, UK gas is up 21%, and German gas is up 23% over 30 days.
The thermal coal price is also 12% higher over the month as power plants switch from gas to coal.
In the latest developments, US President Donald Trump threatened to hit Iran's electricity plants, oil facilities, and desalination plants if the Strait of Hormuz is not reopened.
Trading Economics analysts said the threat overshadowed Trump's earlier comments that negotiations with Iran were progressing well.
The analysts said:
Iran-backed Houthis in Yemen also entered the conflict by targeting Israel over the weekend, while Tehran is reportedly urging militant groups to prepare for a renewed campaign to disrupt Red Sea shipping.
Such developments risk further tightening energy flows from the Middle East, as two of the main strategic waterways in the world for trade and energy supplies could potentially be cut off.
With ASX 200 energy shares on fire right now, here are four stocks that the experts rate a buy.
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Santos Ltd (ASX: STO)
The Santos share price is $8.01, down 0.3% today and up 11.4% over the past month.
Last week, UBS commenced coverage with a buy rating on Santos shares.
The broker has a 12-month price target of $8.80 on this ASX 200 energy share.
Karoon Energy Ltd (ASX: KAR)
The Karoon Energy share price is steady on Tuesday at $2.14.
Karoon Energy shares have soared 20.2% over the past month.
Earlier this month, Jarden reiterated its buy rating on this ASX 200 energy share.
The broker lifted its 12-month target from $1.57 to $2.47.
Whitehaven Coal Ltd (ASX: WHC)
The Whitehaven share price is $9.62, down 2.2% today and up 21.2% over the month.
Last week, UBS reiterated its buy rating and lifted its price target on this ASX 200 coal share significantly.
UBS moved its 12-month target from $7.90 to $10.10.
Viva Energy Group Ltd (ASX: VEA)
The Viva Energy share price is $2.59, up 2.4% on Tuesday and up 42% over the past month.
Last week, RBC Capital upgraded this ASX 200 energy share to a buy rating.
The broker also lifted its 12-month price target from $1.90 to $2.50.
