Strait of Hormuz shut, oil supply squeezed — load up on energy stocks while prices stay high
The Iran war has shut down the Strait of Hormuz, the narrow waterway that about one-fifth of the world's oil passes through. Even if a peace deal comes soon, analysts say cheap oil is a thing of the past — prices are likely to stay elevated.
Idea
The Strait of Hormuz is the world's most important oil chokepoint, and it's effectively closed because of the Iran war. That squeeze on supply is pushing oil prices up fast. Even if Washington and Tehran reach a ceasefire soon, experts are warning that the era of cheap oil is over — too much infrastructure damage and too much lost supply to go back to $60 barrels. That means oil companies like Exxon and Chevron are earning windfall profits, and their stocks tend to climb when oil stays stubbornly high. An ETF like XLE gives you broad exposure to the whole sector without picking a single winner.