The chaos in Iraq is understandably distressing many, but in a weird twist, investors who own energy stocks are benefiting from the unfortunate situation.
In fact, violence in the Middle East and Vladimir Putin’s use of withholding natural gas as an economic weapon against Ukraine are actually lifting the energy sector to record levels.
That’s for two reasons. The obvious one is that higher energy prices translate to larger revenue for producers.
But there’s a spillover impact: Rising geopolitical tensions make U.S.-focused exploration and production companies all that much more appealing.
“If you can say you don’t have any Middle East operations, you don’t have to worry about Russia and oh by the way, we’re growing our production double-digits — that’s a pretty attractive story for investors,” said Brain Youngberg, an analyst who covers energy companies at Edward Jones.
via CNN
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Alfonso Esparza
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