Oil Geopolitical Risk, Surprising Positive Oil Fundamental Data, Ideas with High Oil Price Upside
In this piece, I analyze what higher oil prices would mean for oil-levered ideas I've shared so far.
Is Trump “TACO”-ing on his promise to support Iranian protestors and retaliate for their massacres, or not? Will Venezuelan barrels rush onto the market, or will limited additional supplies be added for years? Why are Russian and Kazakh exports down so much recently, and will OPEC+ continue to show signs of limited spare capacity?
Concurrently, Chinese oil imports are at record highs:
US crude oil production is in decline, and forecasts are being revised lower:
And exposure to energy stocks is near record lows:
In a world where OPEC spare capacity has already been drawn down by production increases, and where non-OPEC supply growth is expected to flatten and decline into 2026, even a modest disruption could send oil prices, and related equities much higher.
I have been adding to my oil leveraged positions recently, due to stronger oil market fundamentals than consensus, compelling valuations, and the elevated possibility of a “right tail event” from oil geopolitical risk.
Several ideas that I’ve shared have meaningful oil price torque. Below, I run through oil price sensitivities on these ideas to show how much incremental cash flow they could generate at higher oil prices, and how that could translate to much higher share prices.
Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence.
