US oil and gas companies are set for a blockbuster earnings season, helped by energy prices that have been soaring as the war in Iran persists. Yet, that may still fail to pull the stocks out of their rut.

Energy companies are estimated to report a 129% jump in second-quarter earnings from a year ago, according to data compiled by Bloomberg Intelligence. That would be the biggest such expansion among all sectors in the S&P 500 Index.

Meanwhile, energy stocks have risen about 5.4% since the beginning of the Iran conflict, lagging the US equity benchmark’s 6.4% jump over the same period while Brent crude futures advanced 24%.

Since it’s difficult to ascertain how long a geopolitically driven oil price escalation will last, “the market has tended to discount the sustainability of high prices and you see that in the way it is treating the oil and gas companies,” Dan Pickering, chief investment officer at Pickering Energy Partners, said in an interview.

The uncertainty surrounding the war in the Middle East has whipsawed energy stocks since late February, depending on whether there’s an escalation in the conflict that pushes oil prices higher or a ceasefire, as investors try to make sense of the daily headlines. XLE, an exchange-traded fund that tracks the sector, shed $2.5 billion in the second quarter and has posted outflows for the month through July 24.

Chevron Corp. and ExxonMobil Holdings Corp. will kick off earnings for the integrated oil companies on Friday. Chevron is expected to see a 219% year-over-year growth in profit in the second quarter, and ExxonMobil is estimated to report a 116% gain. Shares of Chevron and Exxon are up about 3% since the war began in late February.

Next week, results are due from ConocoPhillips, EOG Resources Inc., Occidental Petroleum Corp. and Diamondback Energy Inc., among other large US energy stocks.

So far, even some of the companies that have posted second-quarter earnings that exceeded estimates, like SLB Ltd. and peer Baker Hughes Co., are still down since the Iran war started in late February. Refiner HF Sinclair Corp., meanwhile, has bucked that trend, with earnings that surpassed expectations and an 80% jump in share prices over that period.

Profit and Cash Gains

Investors will be focused on how major energy firms like Chevron and ExxonMobil plan to spend their money, given that their free cash flow estimates for the second quarter show at least triple-digit growth.

“We’d love to see business continue as usual and if they get a little bit of a windfall, can they buy back stock if it’s a reasonable price, can they increase their dividend?” Brian Laks, chief investment officer at Old West Investment Management, said in an interview.

But increased shareholder returns may not materialize just yet, according to TD Cowen analyst Jason Gabelman.

“Given the potential transient nature of the commodity strength, I think they may be a bit hesitant to raise the buyback just yet,” Gabelman said in an interview. “There’s also of course political sensitivities to that. You don’t want to make it seem like higher oil prices, which tend to be politicized, are resulting in windfall earnings.”

Canadian major energy producers are also expected to see profit growth when they report earnings in August. Suncor Energy Inc. is expected to see a 323% growth in earnings, while Canadian Natural Resources Ltd. is expected to see a 181% gain. The firms benefited from increased demand for oil outside of the Middle East, with Suncor rising 20% since late February while Canadian Natural Resources is up 9%.

For now, estimates show that major US oil companies are expected to continue to see earnings growth in the third quarter. Some longer-term investors in the energy sector see a fundamental case for the stocks regardless of how the Middle East conflict impacts companies in the sector.

“We don’t view it as ‘you can only like these things because there’s a war and we get this temporary boost,’” Old West’s Laks said. “We liked them when oil was at $60 or $70, and if you get these temporary disruptions and it’s at $90, well that’s just a bonus.”