Oil spikes on new Iran strikes — ride the energy rally with Exxon and Chevron
Fresh U.S. military strikes in Iran have rekindled fears that oil shipments through the Strait of Hormuz — a chokepoint for roughly one-fifth of the world's oil — could be disrupted. Oil prices jumped on the news, and analysts warn gas could hit $5 per gallon if the standoff continues.
Idea
The Strait of Hormuz handles about 20% of global oil shipments. Every time military escalation in the region has flared up over the past decade, oil prices have spiked at least 5-10% within two weeks. This time analysts are already warning that $5 gas is possible if the strait is disrupted. That kind of supply fear directly lifts the share prices of major U.S. oil producers like ExxonMobil and Chevron, which profit from higher crude prices. The move is even more potent because oil had been sliding earlier in the week on peace-deal hopes — so a lot of traders were positioned the wrong way and now have to scramble to buy back in.