Strait of Hormuz shut down as U.S. and Iran clash — load up on U.S. oil stocks
Escalating military conflict between the U.S. and Iran in the Persian Gulf has forced the closure of the Strait of Hormuz, a critical global oil shipping route. At the same time, U.S. crude oil storage levels are rapidly falling toward critical lows.
Idea
The Strait of Hormuz is a bottleneck for roughly a fifth of the world's daily oil supply. As attacks force its closure and storage levels dwindle, oil prices are likely to keep climbing. U.S. oil producers who don't rely on the strait are in a prime position to cash in on these skyrocketing prices, as they can sell their supply at massive premiums while global competitors are cut off. Buying shares in major domestic producers like Chevron and ExxonMobil is a straightforward way to play this supply crunch.