The media has tried to downplay it.
The idea that the Hamas attack on Israel and the subsequent retaliation by Israel would unlikely affect the price of oil since Israel is not a significant producer of oil.
But this assumes the war won’t spread throughout the Middle East, which accounts for about 30% of global oil production. This is not a safe assumption to make. Particularly when you consider that Iran helped finance and plot the attack on Israel, Saudi Arabia put its normalization talks with Israel on hold, and well-armed Hamas sympathizers in Iraq said they were prepared to target U.S. bases with missiles if Washington involved the U.S. in this conflict.
Which, we know, is already happening.
On Sunday, there was shelling on Israel’s northern border with Lebanon, and Israel also struck Syrian airports in Damascus and Aleppo.
While no one wants this to escalate and spread, only a fool would believe such a thing isn’t going to happen. And make no mistake: this will affect the price of oil.
Brent oil futures have already inched up over $90, and it’s not going to take much to get them over $95. Particularly if Iran doubles down on its support for groups launching attacks on Israel.
While oil isn’t typically my focus, I certainly won’t ignore an opportunity to make a few bucks from it when given the opportunity. And I definitely see this as an opportunity.
If you’re convinced that this war is going to spread and get worse, then consider grabbing an oil ETF or ETN this morning to get some broader coverage. Here are a few worth checking out …
- United States Oil Fund (NYSE: USO)
- ProShares Ultra Bloomberg Crude Oil (NYSE: UCO)
- Invesco DB Oil Fund (NYSE: DBO)
- United States 12 Month Oil Fund (NYSE: USL)
- MicroSectors Oil & Gas Exp. & Prod. 3x Leveraged ETN (NYSE: OILU)
While I would love nothing more than to see this war come to a peaceful end, I know this is unlikely. And as a result, oil prices will spike and stay above $90 long enough for you to make a few bucks.