Energy price shocks have historically boosted European stocks by up to 2.3% over the following one to six months, according to BofA Securities analysts. The research shows this upward trend occurs roughly 70% of the time following steep energy price jumps. High-quality stocks with stable earnings and low debt typically outperform during these periods, while banks tend to lag.

Recent U.S.-Israeli strikes on Iran have triggered a surge in oil and natural gas prices, disrupting energy supplies through the Strait of Hormuz. This narrow waterway handles about a fifth of global oil and liquefied natural gas traffic, making it a critical chokepoint. Brent crude futures jumped to $83.14 per barrel, up from roughly $73 before the conflict began.

European natural gas prices climbed 4.7% to 51.07 euros per megawatt hour, compared to 31 euros a week earlier. BofA's analysis identifies specific European stocks that have historically delivered positive returns during energy price spikes, including those in the luxury goods, consumer staples, and healthcare sectors. The bank's research suggests investors may find opportunities in these defensive sectors as energy market volatility continues.