Things are getting out of control in Iraq, and it's the latest sad chapter in what has arguably been one of America's biggest foreign policy stumbles of the past few decades.

Now, regardless of how you may feel about the Iraq war from a moral or strategic perspective, there is no denying the current disturbing facts on the ground right now. ISIS, an Al-Qaeda-affiliated Islamic extremist group, has seized control of several major Iraqi cities, and the group is moving south quickly with plans to take control of Baghdad from the current government.

This troubling trend is one that's caused geopolitical upheaval, and that upheaval is being reflected today in the price of crude oil. In fact, the price of both West Texas Intermediate crude oil and Brent crude surged to new highs for the year as it became clear that the violence in one of Iraq's major cities had escalated into what could be an overthrow of the U.S.-backed government.

Interestingly, from an actual oil production and shipment standpoint, the upheaval doesn't really mean all that much in terms of real-world constricted supply, at least so far. However, Wall Street and the commodities markets are future pricing machines, and if future crude oil flow from Iraq is interrupted (it currently supplies the world with more than 3 million barrels a day), that would almost certainly push prices higher.

When crude oil prices spike, so too do shares of crude oil production and oil services companies, and one of the biggest and most widely held is Texas-based Halliburton (NYSE: HAL).

The company is likely to be forever linked to the war in Iraq. Former U.S. Vice President Dick Cheney -- a former Halliburton CEO -- was one of the biggest advocates for military action in Iraq after 9/11. But regardless of whether Halliburton had an "in" with the government to rebuild Iraq's decimated energy infrastructure, there's at least one objective reason the company had a leg up on the competition...

Halliburton is extremely good at what it does.

In terms of oil services companies, Halliburton is at the top of the food chain. In its most recent quarter, earnings per share (EPS) jumped 9% from the prior year, to $0.73. Revenue increased by 6% to $7.4 billion, with both metrics easily besting consensus estimates. In terms of valuation, HAL has an attractive forward price-to-earnings (P/E) ratio of just 13, well below the industry average.

In terms of share price performance, HAL has thrived of late thanks to the combination of strong fundamentals and geopolitical risk pushing up oil prices -- first from Russia and Crimea, and now from what seems like the pending fall of Iraq.

Over the past 12 months, HAL is up roughly 60%, and since the start of 2014, shares have gained more than 30%.
Wall Street clearly knows who benefits from higher crude oil prices and rising geopolitical risk. You might even say the Street knows which stocks to back during wartime -- and HAL is near the top of the list.

Action to Take -->
-- Buy HAL at the market price
-- Set stop-loss 8% below entry price
-- Set initial price target at $77.50 for a potential 16% gain in three months

This article was originally published at ProfitableTrading.com:
The One Stock That's a No-Brainer to Own as Oil Prices Rise