Cramer points to oil-sensitive stocks after crude jumps on Iran blockade news

Oil’s sharp move higher on Monday hit the broader market and sent investors hunting for companies that may benefit when fuel gets more expensive. CNBC’s Jim Cramer said on “Mad Money” that the pattern is familiar: money often shifts toward refiners, certain commodity producers and retailers that can gain when consumers feel pressure at the pump.

The move followed President Donald Trump’s announcement that he was reinstating a blockade on Iran in the Strait of Hormuz, according to CNBC. West Texas Intermediate crude, the U.S. oil benchmark, rose 9.4% to finish above $78 a barrel. Brent crude, the international benchmark, gained 9.6% to just over $83.

Cramer described the market reaction as “Pavlovian,” referring to a conditioned response. In plain English, he meant investors tend to reach for the same types of stocks whenever oil prices spike, because higher crude changes costs and pricing power across the economy.

Refiners led Cramer’s list

Cramer said refiners are among the clearest beneficiaries when gasoline prices rise. Refiners buy crude oil and turn it into products such as gasoline and diesel. If tight refining capacity lets them raise pump prices quickly, their margins can improve.

He highlighted Valero Energy as his preferred name in the group, calling it the cleanest way to play limited refining capacity. Valero shares rose about 5% on Monday, according to CNBC.

Cramer also pointed to Dow Inc. as a company that could gain if production disruptions hurt overseas competitors in the Persian Gulf. His reasoning was that Dow relies on domestic energy, which he said is cheaper than energy available to some foreign rivals. Dow shares climbed more than 4% in Monday’s session.

Mosaic, the fertilizer producer, was another stock Cramer said could benefit. Fertilizer is a commodity, meaning buyers often focus heavily on price because products are largely interchangeable. Cramer said higher energy costs in the Gulf could quickly improve Mosaic’s cost position versus competitors. Mosaic stock rose nearly 4%, CNBC reported.

Discount retailers held up better than the market

Cramer said higher gasoline prices can also help discount and off-price retailers, because consumers may look for cheaper shopping options when more of their budget goes toward fuel. He said dollar stores fit that theme, but he favored Walmart and TJX Companies instead.

Walmart shares gained nearly 1% on Monday. Cramer said the retailer’s recent quarter was not its strongest, but he argued its price cuts could help bring shoppers back into stores.

TJX, the parent of off-price chains, slipped about 0.5%. Cramer called it “the real bargain” and said it could benefit if traditional retailers sell excess inventory to off-price chains.

Those retail moves were modest, but they stood out against a weaker market. The S&P 500 fell nearly 0.8% on Monday, while the Nasdaq dropped about 1.5%, according to CNBC.

For individual investors, the takeaway is about how oil shocks ripple through stocks. Higher crude can hurt companies with large transportation or input costs, while helping firms that can pass along higher prices or gain share as consumers trade down.

This story draws on original reporting from CNBC.