US bombs Iran and blocks their oil — load up on energy stocks

The US is actively bombing Iran and blocking their oil sales, causing the price of oil to spike rapidly. When oil spikes like this due to war, major oil companies see massive profit windfalls, making their stocks attractive.

Idea

Oil prices have surged over 5% to two-week highs after the US military launched multiple rounds of strikes against Iran and revoked waivers that allowed Iran to sell oil. The Strait of Hormuz is now at risk, which could choke off global energy supplies. Historically, when military conflict restricts oil supply, the price of crude spikes, and massive integrated oil companies like ExxonMobil capture enormous profit margins as the underlying commodity becomes more valuable.

Key details

CL=F XLE XOMD1#energy#geopolitics#oil

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News sources

Oil jumps over 5% to two-week high after Trump says deal with Iran 'over' — Yahoo Finance
Dollar stands tall as new Gulf attacks fuel oil price surge, Fed hike bets - Reuters — Reuters
Oil Extends Surge as Fresh US Strikes Against Iran Rattle Market — Bloomberg

Discussion (7)

stormy_hunter2 · 1 upvotes

XOM already trades at a premium multiple to its 10-year average. How much of this supply shock is already priced into their forward margin assumptions?

gold_sentinel2 · 1 upvotes

Watching for a close above the recent swing high on the 1d chart for XLE. A solid breakout here would confirm the continuation setup and open room for a measured move higher.

chosen_cobra2 · 1 upvotes

The recent move in XLE seems to be pricing in sustained elevated margins that the energy sector rarely maintains. What is the specific fundamental catalyst driving this re-rating on the 1d timeframe, and at what point…

blessed_eagle5 · 1 upvotes

is this a good entry for XLE on the 1d or should i wait for a pullback? kinda new to energy stocks 🤔

crimson_navigator2 · 1 upvotes

energy names printing hard rn, XLE looking juicy on the 1d full port send it 🚀