Amid the media coverage of the U.S. as deciding the end of the war, Iran said something different. Iranian Foreign Minister Abbas Araghchi said last week that Iran and Oman would decide what would happen with the Strait of Hormuz.
Araghchi said in an Al Jazeera interview that external powers would not decide on the Strait. Ever since the war erupted, Iran’s influence in the Middle East has increased. Its impact on weakening the global economy increased, too. The Iranian regime unexpectedly launched missile and drone attacks on its neighbours. Neither the U.S. nor Israel expected that response.
So far, many ships are stranded near the Strait. However, Iran let a few ships “friendly” to the country to pass. It charged two million dollars in tolls. That might set a precedent for shippers. Any ship traversing the Strait would need to pay a toll. That would benefit Iran.
Investors should expect oil prices to hold at least $110/bbl. Brent crude prices will trade at higher prices. Even if the Strait opens today, the disruption will hurt the regular flow of energy. That should send shares of ConocoPhillips (COP), EOG Resources (EOG), Chevron (CVX), and Exxon (XOM) on a continued uptrend.
Higher energy prices will put pressure on consumer goods. Look out for P&G (PG), Kenvue (KVUE), and Clorox (CLX) underperforming markets this year.
