Should You Buy Phillips 66 (PSX) Amid Escalating Middle East Tensions?

We just covered the Top 10 Stock Picks of Billionaire Paul Singer. Phillips 66 (NYSE:PSX) ranks #2 (see Top 5 Stock Picks of Billionaire Paul Singer).

Elliott’s Stake: $2,484,149,040

Phillips 66 (NYSE: PSX) bulls believe the stock is positioned to gain amid a loss of refining capacity in the US and Europe over the last 18 months. These refineries closed because margins were too thin to justify keeping them open. The Iran war also impacted the industry. Fewer refineries means less competition. Less competition means the ones still running can charge more for their products. PSX is still running, and running better than ever. The company has spent years improving its operations. It now extracts more high-margin products out of every barrel of crude than it used to. Bulls believe this means the current upcycle will be more profitable and more durable than the last one in 2022 and 2023.

The Q1 earnings report supports that view. PSX beat Wall Street estimates despite absorbing a roughly $900 million hit from a winter storm and extreme commodity volatility. That headwind is expected to reverse through the rest of 2026, which should meaningfully boost earnings going forward.

Oakmark Select Fund stated the following regarding Phillips 66 (NYSE:PSX) in its Q1 2026 investor letter:

“Phillips 66 (NYSE:PSX) was the top contributor during the quarter. The U.S.-headquartered downstream energy company’s stock price rose as it benefited from higher crack spreads (the difference in price between crude oil and refined petroleum), heightened geopolitical risk and solid fourth-quarter 2025 earnings. Fundamental results have been encouraging, and we believe PSX is set to be…….. (Click Here to Read the Letter in Detail).”

While we acknowledge the risk and potential of PSX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PSX and that has 10,000% upside potential, check out our report about the cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy. 

Disclosure: None. Follow Insider Monkey on Google News.

1281292 - 11759070 - 1