A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.

The Iran war has propelled oil prices to above $94 a barrel, up about 30% since the conflict began in late February. That rally has been a boon for investment firms of ultra-wealthy families who made opportunistic bets on oil in recent years. 

Since the pandemic, private equity funds and other institutional investors have backed away from oil and gas in part due to pressure from environmentally conscious stakeholders. Family offices have stepped in to fill some of that void, investors and advisors told CNBC.

While many family offices are environmentally minded — with a September survey by Citi Private Bank showing more than half of respondents reporting they were likely to make sustainable investments in the next five years — they’re not subject to the same ESG mandates as private equity firms or endowments, which have faced pressure to divest from oil and gas.

“Family offices are contrarian players. A lot of investors left the sector for non-fundamental reasons, like endowment funds, who had students protesting,” said Keith Behrens, head of energy and clean energy investment banking at Stephens. “Family offices saw that flight of capital, and it created really good investment opportunities for them. They were able to come in and invest with pretty reasonable cash flow multiples.”

Family offices also have an edge on private equity players as they generally hold investments for longer periods, meaning they can weather oil price fluctuations and dealmaking downturns, according to Gillon Capital’s Jeff Peterson.

“We back teams who are looking to build businesses over the long term, because that’s where we really differentiate ourselves. A fund can only really hold a business for their fund life,” he said. “We invest for generations in mind so we can look through current cycles.”

Peterson has managed investments for the descendants of oil tycoon H.L. Hunt for 14 years. About five years ago, A.G. Hill Partners, one of the family’s personal investment firms, doubled down on oil and gas to take advantage of attractive valuations. 

Multiples for the sector typically range between two to three times cash flow, according to Peterson, who is now chief investment officer for Gillon Capital, a family office spun out of A.G. Hill Partners a year ago.

Peterson said the family has taken the lead on major deals in the sector, such as forming a consortium of family offices and a few PE funds for the $2 billion acquisition of natural gas producer PureWest Energy. The family is also an anchor investor in a minerals and royalty fund that has raised about $500 million in capital and has a substantial position in the Permian Basin, which is the highest-producing oil field in the U.S., he said.

The sector is increasingly drawing interest from family offices without ties to energy, according to Tailwater Capital’s Doug Prieto. He leads upstream energy funds, which back oil and gas exploration and production, for the middle-market PE firm. Prieto said the funds have raised about $500 million from family offices without backgrounds in energy and just last week took a commitment from a family office built from an options-trading fortune. 

Family offices without energy expertise are typically seeking to diversify their portfolio with assets that are uncorrelated to stocks and bonds, Prieto said. Oil and gas are also attractive as inflation hedges, he added.

The Trump administration’s efforts to prioritize oil, gas and nuclear power over clean energy have given investors more confidence in the sector, according to Ellen Conley, lawyer and co-chair of Haynes Boone’s energy finance practice group.

Plus, the potential for cash dividends appeals to family offices, she said.

“Family offices are viewing these assets as cash-flowing real assets rather than a speculative commodity gamble,” she said. “We’re dealing with real assets, particularly in Texas, where you have this repeatable cash flow and predictive models.”

Conley said investors’ interest in energy was already on the rise before the recent oil surge. But headlines about oil prices tied to the Iran war have spurred queries from family offices looking to invest, according to Vicki Odette, global chair of Haynes Boone’s investment management practice group.

However, investors who are new to the space can only realistically take advantage of the current price surge by hedging, Peterson said. 

“For anybody to start a drilling program today, you’re really not looking at production this calendar year. You’re looking at next year,” said Peterson. 

Analysts generally expect the current spike to be temporary.

And while high prices are good for existing investors, they make it harder to get deals done, according to Behrens.

“If someone’s selling a property, they’re going to want to sell it at the highest price possible and get the latest day close,” he said. “The buyer is going to say, ‘Hey, that’s great that oil is at $115 a barrel, but three months ago it was at $60.'”

Prieto added that it is possible to have too much of a good thing. High oil prices for a prolonged period of time poses a recession risk, he said. 

“We like to see a robust U.S. economy. I think for us, somewhere between $75 and $85 a barrel feels pretty darn good,” he said. “When you get over $100, you start to have adverse impacts that don’t benefit anyone.”