Middle East clashes are driving up oil and inflation — load up on energy stocks
Oil prices are climbing for the third day straight as clashes between the US and Iran threaten a fragile peace deal and restrict global oil shipments. At the same time, the Federal Reserve just reported that inflation is heating up across the US, largely driven by these rising energy costs.
Idea
Rising geopolitical tension in the Middle East is directly threatening global oil supply routes, pushing oil prices steadily higher. This rising energy cost is now bleeding into the broader economy, causing a wave of new inflation just as the Federal Reserve reported today. When oil prices spike during active conflicts, major oil companies usually see their profit margins expand rapidly, making their stocks an attractive place for investors to park their money while avoiding the broader stock market drop.