Oil may stay expensive even after Iran peace — accumulate energy stocks
The US has struck Iranian military targets twice this week near the critical Strait of Hormuz shipping lane. Even though a ceasefire may be near, analysts say oil prices are unlikely to return to $60 — the structural floor has shifted higher.
Idea
US military strikes near the Strait of Hormuz — through which roughly 20% of the world's oil flows — have pushed crude prices higher. Normally you'd expect oil to crash back down once a peace deal is signed, but analysts are warning that the era of cheap $60 oil is over regardless of how the conflict ends. Years of underinvestment in new oil production, combined with persistent geopolitical risk, mean energy companies are likely to keep printing cash at elevated prices. That makes the energy sector a compelling place to park money even if the headlines improve.