Iran threatens to shut critical oil chokepoint for months — load up on energy stocks while crude climbs
Iran has halted peace talks with the U.S. and is threatening to completely block the Strait of Hormuz, a critical shipping channel for global oil. Industry experts now say oil supply disruptions could last through the end of the year.
Idea
About one-fifth of the world's oil passes through the Strait of Hormuz. Iran is now vowing to shut it down completely, and OPEC analysts believe the supply disruption will drag on for months regardless of any diplomatic resolution. That means oil prices are likely to stay elevated or push even higher, which directly boosts profits for big oil producers. Occidental (OXY) and Chevron (CVX) are among the most sensitive to oil price swings, and the Energy Select ETF (XLE) gives broad exposure. As long as the geopolitical tension persists, these stocks have a strong tailwind.