Strait of Hormuz is choked off and cheap oil isn't coming back — buy big energy names
The Strait of Hormuz — the narrow passage where roughly a fifth of the world's oil travels every day — has been shut down since the Iran war broke out in February. Even if a ceasefire is reached soon, experts say cheap oil isn't coming back because the damage to supply routes and trust is already done.
Idea
The closure of the Strait of Hormuz has choked off the world's most important oil shipping lane, and analysts now believe oil prices will stay elevated even if the Iran war ends. When oil stays expensive for a long time, the big energy producers rake in record profits — and their stock prices tend to follow. China's export prices just jumped the most in three years because of the oil shock, which means the inflation ripple is spreading worldwide and supporting higher energy prices across the board. Buying a basket of major oil companies lets you ride this trend without betting on a single company.