Middle East peace talks stall, oil keeps climbing — ride the energy rally on Exxon and Chevron
Fighting between the U.S. and Iran is getting worse, and a hoped-for peace deal is falling apart. Because the conflict threatens oil shipments from the Middle East, the price of oil has been climbing for three days straight.
Idea
When peace talks break down in a major oil-producing region, oil prices tend to keep rising as markets worry about supply disruptions. This specific conflict directly threatens the Strait of Hormuz, a critical chokepoint for global oil shipments. With the price of oil already on a three-day winning streak, companies that drill and refine oil should see their shares track the commodity higher. Additionally, the rising cost of energy acts as an inflation driver, which makes hard assets like oil companies an attractive place to park money.