US strikes near Hormuz push oil toward $97 — load up on energy stocks as Middle East tensions escalate
The U.S. has carried out airstrikes on Iranian military targets near the Strait of Hormuz for the second time this week, with no peace deal in sight. Oil prices have jumped nearly 3%, pushing Brent crude toward $97 a barrel.
Idea
The Strait of Hormuz is one of the world's most critical oil chokepoints, and military strikes right next to it are exactly the kind of event that keeps oil prices climbing. Brent crude is already approaching $97, and with no ceasefire agreement in sight, the premium on oil could keep expanding. Big integrated oil companies like ExxonMobil and Chevron tend to move higher when crude rises, because every extra dollar per barrel flows almost directly to their bottom line. With inflation data also running hot, there's a double tailwind — higher oil reinforces inflation fears, which in turn keeps the 'real asset' bid alive.