Oil supply crisis brewing as Iran blocks key shipping lane — load up on energy stocks
Iran has halted negotiations with the U.S. and is threatening to completely block the Strait of Hormuz, a critical oil shipping route. Industry analysts now expect the supply disruption to drag on through the end of the year.
Idea
The Strait of Hormuz handles roughly one-fifth of the world's daily oil supply. Iran has stopped negotiations and is vowing to block it entirely, and analysts now believe the disruption will last through year-end even if the waterway reopens soon. That kind of prolonged supply shock has historically driven energy stocks higher for months at a stretch. Oil prices are already rising, and the big integrated producers like Exxon and Chevron stand to earn significantly more per barrel. An ETF like XLE gives you diversified exposure to the whole sector without single-stock risk.