Today's winner : Domestic Oil companies
Chinese petroleum companies like Petro China has a huge exposure to the oil fields in Iran. India imports LPG heavily from Iran through this Strait.Even though Saudi and Iraq can transport close to 10 million barrels through pipelines ,any counter attack by Iran on U.S Air bases in Saudi, Iraq and Kuwait will put this pipelines in risk.
Israel is a passive player in this since Uncle Sam is on the front of the Crisis, if Iran Ships are attacked, the Long Range missiles will be gunning for Israeli Bases and Jewish Settlements. If the Israeli Air Defense comes into the Gulf , we have a full fledged war in the cards.
I have screened through many of Major Oil players with exposure to Middle East and one who are not.
Companies with Huge exposure to Middle East Oil
Exxon Mobil
Apache
Petrochina
Marathon Oil
Hess
Companies with Least exposure to Middle East oil can be categorized into 4 Regions.
East Europe and Northern Europe (Russia, Norway, Netherlands etc)
Companies in South America
Canadian Oil Sands
U.S Domestic oil and offshore drillers (Alaska and Gulf Of Mexico)
With that in mind, these small players will be the first one to Rally followed by Big players since they are less leveraged across the world.
Based on the Exposure and Leverage i came up with Good Names to play in case of Iran Conflict or a Stand off in Middle East
Accumulate
Petro Brasil (PBR)
Canadian Natural Resources (CNQ)
Even though it is a very unfortunate situation and Millions will be impacted , the Good Old Mutual Funds and Hedge Funds would still be Reaping the Blood fromthis Desert Sands by Hedging Oil futures and Oil Stocks across the Globe. The Market will react negatively to this Crisis by selling Equities and all World Currencies ,after Buying hoards of U.S Dollars, which would drive the Oil prices still higher.
The Best way to play this short term event is to Buy Oil companies with Least exposure to Middle East and ones which are closer to North American Shores.
Sit Tight and Play Safe.
The Oil is trading in range of 98$ to 105$ per barrel due to the recent war of words with Iran's Nuclear weapon program. It's a no brainier that the Iran conflict will drive the Oil prices to the range of 140$ plus not seen in the recent past. With world's 25 % of oil flowing through the Strait of Hormuz and half of them flowing to trading partners in raging economies of East, this makes it a very notable crisis .
Israel is a passive player in this since Uncle Sam is on the front of the Crisis, if Iran Ships are attacked, the Long Range missiles will be gunning for Israeli Bases and Jewish Settlements. If the Israeli Air Defense comes into the Gulf , we have a full fledged war in the cards.
I have screened through many of Major Oil players with exposure to Middle East and one who are not.
Companies with Huge exposure to Middle East Oil
Exxon Mobil
Apache
Petrochina
Marathon Oil
Hess
Companies with Least exposure to Middle East oil can be categorized into 4 Regions.
East Europe and Northern Europe (Russia, Norway, Netherlands etc)
Companies in South America
Canadian Oil Sands
U.S Domestic oil and offshore drillers (Alaska and Gulf Of Mexico)
With that in mind, these small players will be the first one to Rally followed by Big players since they are less leveraged across the world.
Based on the Exposure and Leverage i came up with Good Names to play in case of Iran Conflict or a Stand off in Middle East
Accumulate
Petro Brasil (PBR)
Canadian Natural Resources (CNQ)
Chesapeake Energy (CHK)
Sell
Exxon Mobil (XOM)
BP
Apache (APA)
Marathon Oil (MRO)
Hess (HESS)
Even though it is a very unfortunate situation and Millions will be impacted , the Good Old Mutual Funds and Hedge Funds would still be Reaping the Blood fromthis Desert Sands by Hedging Oil futures and Oil Stocks across the Globe. The Market will react negatively to this Crisis by selling Equities and all World Currencies ,after Buying hoards of U.S Dollars, which would drive the Oil prices still higher.
The Best way to play this short term event is to Buy Oil companies with Least exposure to Middle East and ones which are closer to North American Shores.
Sit Tight and Play Safe.
