With Israel at war with Hamas, oil prices are starting to gush higher. And unless the situation can cool off – which doesn’t seem likely at this point – there’s fear the situation could get far worse than it is now. For one, if Iran was also involved in the attack, they could face potential retaliation, which could inflame concerns over the Strait of Hormuz.
After all, as noted by MarketWatch, “Iran remains a very big wild card and we will be watching how strongly [Israeli] Prime Minister Netanyahu blames Tehran for facilitating these attacks by providing Hamas with weapons and logistical support,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.
Two, there are growing calls for tightening U.S. sanctions against Iran with this latest situation. “Most immediately, Biden is facing calls from both Democratic and Republican lawmakers to tighten enforcement of sanctions restricting oil exports by Iran, Hamas’ main sponsor and supporter,” as noted by E&E Daily.
One way to trade the potential for higher oil prices is with stocks, such as Exxon Mobil (XOM), which also carries a yield of 3.4%.
Sincerely,
Ian Cooper
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