Middle East chaos disrupts global energy supply — accumulate oil and gas ETFs
Thesis
A recent tanker attack in the Middle East has already pushed oil prices higher, but the situation is escalating. Reports indicate that QatarEnergy is withholding liquefied natural gas shipments to Italy until September due to the conflict. When combined with warnings that a larger war involving Iran may be approaching, this creates a perfect storm for energy supply disruptions. Even if peace talks happen, the physical disruption to gas and oil shipments is already locked in for months, giving energy stocks and oil funds a strong floor of support.
Strategy approach
Build a long-only momentum strategy on XLE and USO using a daily (D1) timeframe. Enter when the asset makes a 15-day high. Exit if the asset breaks below its 20-day Simple Moving Average, or set a maximum hold period of 45 trading days.