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Why War Is Great for Energy

by Marin Katusa, Casey Research:

“War.
What is it good for?
Absolutely nothing – Say it again…”
Edwin Starr

I beg to differ. War is fantastic for energy stocks. Even the threat of war can send energy prices soaring.

So for energy investors, war is far from a good-for-nothing – it is great for portfolios.

The best part is that the human race is incapable of getting along. That means there is always one potential war or another sitting just around the corner.

Today is no exception. Think about it – why is Brent oil trading at US$114 per barrel, only a few percentage points away from its highest levels in the last three years? It certainly isn’t because of strong European demand, or a soaring Chinese economy, or a pile of Buy orders from Japanese traders.

It’s because Iran wants to build a nuclear weapon, and that means that Israel is threatening war (again). This isn’t a hypothesis or a fear-mongering tactic – it is a fact. An Israeli attack would prompt Iran to immediately lace the Strait of Hormuz with mines, blocking passage for the 13 tankers carrying 15.5 million barrels of crude that usually transit the strait every day. Oil prices would shoot up overnight.

Read More @ CaseyResearch.com

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