Stock of the day: Karoon Energy

(AI video summary)

This video was created on 25 March 2026 for IG audiences by ausbiz.

ASX code: KAR

Karoon under pressure as oil retreats on geopolitical uncertainty

Karoon Energy traded lower today as crude oil softened in Asian trade. The company remains the 34th most shorted stock on the ASX 200, reflecting caution around pure‑play oil producers.

Overnight, United States (US) President Donald Trump said the US was speaking to ‘the right people’ in Iran, but crude still eased as Iran launched further attacks and the US prepared to deploy 3000 troops to the Middle East.

Analysts divided on Karoon

Bull case

• Supply was already tight before the conflict and remains a key theme for 2026.
• One analyst’s firm increased energy exposure to 20–30%, expecting oil to stay elevated.
• Recent share price weakness is viewed as an opportunity rather than a trend shift.

Bear case

• Oil is considered too volatile, having swung from negative levels to US$120 in recent years.
• Current prices are seen as inflated and vulnerable to a pullback if tensions ease.
• Crude could fall back toward US$70, placing pressure on Karoon’s valuation.

Investment outlook

Rather than owning oil producers, some analysts favour companies servicing the energy sector. They point to long‑term underinvestment in Australia’s energy infrastructure and rising demand for asset maintenance and refurbishment. Duratec was highlighted as a beneficiary, with energy revenue rising from 0% to 12% and now 40%.