Supply stays strained, as the Houthis twice struck Saudi Arabia's East-West pipeline, a tanker hit a mine in Hormuz, and Gulf refined-fuel exports sit near 35% of normal. Most energy shares have run well ahead of a nearly flat S&P 500. Yet Iraq pumped 4.6 million barrels a day in October, its most since 2019, and peace hopes briefly sent Brent below $90.
Updated Nov 14
Oil & Gas E&P, Oil & Gas Midstream, Oil & Gas Refining & Marketing and 2 more industries
The reasoning of the connection that opened this thesis. It is not updated.
Exxon Mobil may gain less than the oil price suggests. The Qatari disruption could also hurt Exxon's own gas projects, and a quick cease-fire would pull oil down before any gain shows up in reported results.
122 for · 26 against
Houthi militants attacked Saudi energy sites, including Aramco facilities, and Aramco ordered staff out of its Dhahran headquarters. Saudi Arabia is a huge oil supplier, so traders fear less oil will reach buyers. That fear, along with a Libyan pipeline shutdown and reports that Trump is weighing new strikes on Iran, pushed Brent to about $114, on course for a third weekly gain of about $6.
A producer sells what it pumps at the going market price, so when the price rises, each barrel earns more. Separately, the Hormuz crisis that followed the Iran war is still restricting Qatari liquefied gas shipments (gas chilled into a liquid so tankers can carry it). Together with low storage, that has pushed European gas to its highest price since December 2022.
Exxon Mobil produces and sells crude and refined products, so it receives these higher prices. Airlines are on the other side, because they buy jet fuel at the market price. How much extra profit Exxon earns is not yet known.
Average move since Tenji added each name: +11.1% · S&P 500 since the thesis opened Jul 6: +0.4% · 18 of 25 names moving with the thesis
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How long it stays closed is the whole question: weeks is a spike, months changes the picture.