When the U.S. bombed military and government targets in Iran, oil prices shot up immediately. Though prices pulled back to around $91 recently, the drop might prove temporary.
The U.S. potentially created an oil crisis that risks worsening. Oil stocks like Exxon Mobil (XOM) might rise to new heights. Pipelines like TC Energy (TRP), Enterprise Products (EPD), and Enbridge (ENB) will likely offer sizable capital gains and steady dividends.
The U.S. President’s flip from a 48-hour warning to Iran to open the Straits, followed by a 5-day pause, created tradable, short-term moves. However, Iran responded with five conditions that would end the war.
The five conditions are to halt the aggression and assassinations, establish mechanisms that ensure war does not get imposed on Iran, payment for war damages and reparations, ending war across all fronts, and recognizing Iran’s sovereignty over the Strait of Hormuz.
Neither the U.S. nor the Middle East countries would likely accept those five terms.
Iran’s regime does not need the war to last forever. It needs the Strait to be closed as long as possible to maximize the damage to the global economy. Nearly every facet of the economy depends on oil prices, which have enjoyed low prices for several years.
Fears of a forever war would cause panic selling in AI-related names. They are priced as if growth continues at the current trajectory. An economic slowdown would cause corporations to seek cost cuts; they would slash their AI project spending.
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