Oil keeps climbing as Middle East peace deal looks shaky — ride the energy rally on Exxon and Chevron
Oil prices are climbing for the third day in a row because recent clashes between the US and Iran are ruining chances for a peace deal. At the same time, major oil producers like Kuwait are scrambling to find new ways to store oil abroad because the war has blocked normal shipping routes.
Idea
The continuation of military strikes in the Persian Gulf is directly threatening a fragile ceasefire, which immediately disrupts global oil shipping routes. Because a key route like the Strait of Hormuz is at risk of being blocked, countries are physically struggling to move oil, creating a real shortage in supply. Kuwait's separate announcement that they need to expand storage facilities abroad proves that industry experts expect these shipping disruptions to last for a long time. As long as the threat to these major shipping lanes remains, the price of oil has a strong reason to keep climbing, which lifts the stock prices of major oil producers.