Shares of oil producers are expected to rise further following the conflict in the Middle East, which has severed the Strait of Hormuz, effectively removing 20% of global oil and LNG supply from the market, said Jarden in a Friday note.

Jarden believes that the muted market response to the ongoing conflict stems from a "boy who cried wolf" mindset and adds that the "wait-and-see approach is reaching its expiration date".

The research firm added that, in the worst-case scenario of a two-month Strait closure, Brent oil prices could reach $150 per barrel, while a six-to-eight-week conflict would lead to a 2026 average of $90 per barrel.

Jarden has an overweight rating on Woodside Energy (ASX:WDS), Santos (ASX:STO), and Origin Energy (ASX:ORG) with price targets of AU$34, AU$8, and AU$12.60, respectively.

Beach Energy (ASX:BPT) has an underweight rating with a price target of AU$1.10, and Karoon Energy (ASX:KAR) has a rating of buy with a price target of AU$2.50.