Macro backdrop Iran and oil Around 20–30% of global seaborne oil and a big chunk of LNG flows through the Strait of Hormuz, right off Iran’s coast. Iran has warned ships not to transit and traffic has already dropped sharply as majors pause shipments, which tightens near-term supply and spikes risk premia in crude. This isn’t just an oil story it’s a global shipping and insurance story that can ripple into broader input costs and risk sentiment Oil and inflation how it actually transmits Historically, a 10% oil shock modestly lifts overall CPI and has bigger impact on the energy component; core CPI responds slowly over several quarters. One study finds a 6% real oil price increase can raise the price level by ~20 bps and trigger tighter Fed policy, so multiple shocks can compound over time. Equity positioning who benefits first Higher crude with relatively stable operating costs expands margins for integrated majors like $XOM Oilfield services exploration & capex beta If prices stay elevated, E&Ps eventually increase drilling and completion budgets, which is where service names like $HALtend to have operating leverage Midstream names like $ET will benefit as more oil and gas flow due to demand Risks and FOMO Geopolitical risk trades can reverse fast if headlines change or if policymakers step in to stabilize flows. Don’t FOMO into a stock Let price come to your levels and respect your risk. Use your technicals analysis Position sizing > prediction. Size as if you’re wrong first, right second.
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22 Comments
Le Corb@lecorb · 7mo
Thanks for the perspective! Higher oil prices are never a good thing to the economy. Unlike rising interest rates, oil prices have such an immediate impact to gas prices at the pump and a shock to the economy. Every service truck on the road gets a whack in the month and has such an immediate impact on operating expenses, which shows up in the next quarterly earnings. I’m heavy in energy stocks, so won’t be chasing, but need to consider trimming with rising prices and managing risks of shock pullbacks.
Kyle Jones
@investwithkyle · 7mo
Size as if your wrong first, right second. Absolutely love this statement and it’s so very true
Luca @ldf54 · 7mo
Holding LEAPS in $ET and $XOM so hopeful that they have a great few months 🥳
AbundanceSeeker @abundance_seeker · 7mo
Thanks for this! I was watching Bloomberg tonight and saw news that Thailand is suspending their oil exports. Also, Iran was one of China’s biggest oil sources. I think it’s highly probable that this will have a broader domino effect.
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