WSJ learned about the growth of oil companies' shares due to expectations of a shortage of raw materials

Shares of US oil companies are showing growth amid expectations of a long-term oil shortage due to the conflict with Iran and supply disruptions, The Wall Street Journal (WSJ) reported on April 3.

"The investment attractiveness increases as the war progresses," said Dan Pickering, founder of the financial company Pickering Energy Partners.

It is specified that the deterioration of the situation on the oil market is a plus for oil companies. Due to supply disruptions, including restrictions on the Strait of Hormuz, less oil enters the market, which means its price is rising. Already, quotes have exceeded $100 per barrel, and the energy sector has become the only growing segment of the S&P 500 index, the article explains.

Companies like Exxon Mobil and Chevron earn more because they sell oil at a higher price. Additionally, investors expect that the deficit will persist: reserves are being depleted, and production in the United States is slowing down.

"The [futures] curve is moving up because the physical market is getting more tense every day," Pickering said.

Thus, the worse the supply situation, the higher the prices, and the greater the profits of the oil companies in which they invest, the WSJ points out.

Oil is stronger: the raw materials market is waiting for a jump in prices to $ 200 per barrel

The Middle East conflict may lead to a reduction in fuel supply in April-May

Bloomberg reported on April 1 that the international coalition for unblocking the Strait of Hormuz, consisting of 35 states led by the United Kingdom, plans to switch from diplomacy to economic pressure on Iran in the event of a failure of the negotiation process. Only after exhausting all diplomatic and economic instruments, the coalition members intend to move on to discussing a scenario of potential military intervention, the newspaper noted.

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