Strait of Hormuz shut down, oil supply squeezed — load up on big energy stocks
The Iran war has shut down the Strait of Hormuz, the narrow waterway where roughly a fifth of the world's oil passes through. Even if peace talks succeed, analysts believe oil prices won't return to the $60 range anytime soon.
Idea
The Strait of Hormuz closure has choked off a massive share of global oil shipments, creating an immediate supply squeeze. Even if a ceasefire materializes, the damage to oil infrastructure and shipping routes won't be reversed quickly — analysts are saying the era of cheap oil is over. That means energy companies are likely to keep collecting windfall profits for quarters to come. Major oil stocks like ExxonMobil and Chevron tend to rally hard when supply fears spike and stay elevated as long as oil prices remain high.