ASX Plunges A$95 Billion on Oil Shock: 5 Stocks to Buy Right Now

ASX Stocks to Buy After the Oil Shock

The ASX 200 fell as much as 4.4% intraday before closing 2.85% lower at 8,599, its worst session in nearly a year, with A$95 billion erased in one day. The trigger was an oil price surge of 35% in a week, driven by fears that escalating Middle East tensions could close the Strait of Hormuz, with Brent crude pushing past US$110 per barrel following reported attacks on the Shahran oil depot in Tehran. Hotter-than-expected inflation data has also put an RBA rate hike back on the table. We believe this is a geopolitical repricing, not a fundamental collapse, and that distinction matters enormously for what investors do next.

What are the Best ASX Stocks to invest in right now?

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Why the ASX Is Crashing and Why It Is Not as Bad as It Looks

The Strait of Hormuz is the narrow waterway through which roughly 20% of the world’s daily oil supply passes. When conflict threatens this route, oil spikes and markets sell off fast. Banks, miners, gold stocks, and uranium names all fell sharply as investors moved to cash.

What makes this different from a genuine bear market is that no company’s earnings deteriorated overnight. These are fear-driven moves, not earnings-driven ones. History shows geopolitical sell-offs like this typically resolve within 30 to 35 days when there is no underlying economic breakdown.

The key risk is escalation. If the conflict deepens or the RBA actually delivers a rate hike, the pain could extend. But for now, the selloff looks like an opportunity for investors who know where to look.

5 ASX Stocks To Buy in This Selloff

Santos (ASX: STO) is our top pick. The Barossa LNG project is ramping, and production is forecast to grow 30% by 2027, meaning Santos is directly leveraged to the oil price surge. Broker consensus is firmly in the buy camp, and Santos offers better value than Woodside at current levels on most valuation metrics.

Woodside Energy (ASX: WDS) is up 33% in 2026 and remains the safest large-cap energy play on the ASX. With a dividend yield above 5%, it provides income while you wait for the volatility to pass. We would hold rather than aggressively chase at these levels, but it stays as a core energy position.

Karoon Energy (ASX: KAR) surged around 17% this week as investors piled into pure-play oil exposure. At a price-to-earnings ratio of just 7, Karoon offers significant leverage to higher oil prices. This is the highest risk, highest reward option on the list.

Electro Optic Systems (ASX: EOS) is largely immune to the oil shock selloff. Defence stocks are being bought, not sold, in this environment, and EOS stands out with a tripled order backlog. At current levels, it looks better value than DroneShield.

Northern Star Resources (ASX: NST) sold off hard this week alongside broader gold stocks, which we see as a re-entry opportunity. NST joins the ASX 20 on 23 March, replacing Santos, which forces passive funds to sell STO and buy NST ahead of the rebalance, a compelling technical tailwind regardless of short-term market sentiment. With gold trading around A$7,200 per ounce, the structural bull case remains firmly intact.

What to Avoid Right Now

Steer clear of BHP and Rio Tinto for now. China has set its GDP growth target at its lowest level in 35 years, between 4.5% and 5%, a separate structural headwind that goes well beyond the oil shock. ASX banks also carry a rate hike risk that makes adding here premature. Wait for RBA clarity first. Uranium stocks, including Deep Yellow and Boss Energy, have been hit hard. The sector may recover, but let the dust settle before re-entering.

The Investor’s Takeaway

Three scenarios define what comes next. If oil prices fade as tensions ease, this selloff becomes a textbook buying opportunity. If oil holds at current levels, energy names continue to outperform while the rest of the market drifts sideways. If the conflict escalates significantly, capital preservation becomes the priority.

Our verdict is clear. Energy is the only rational overweight today. Gold is a buy-the-dip candidate after this week’s pullback. Everything else warrants patience until the RBA picture becomes clearer. Avoid lump-sum entries and spread your buying across this week to manage the volatility risk.