Oil War! TACO Investing At Its Most Profitable

“I may do it, I may not do it. Nobody knows what I’m going to do.” — President Donald Trump.

Well, so much for the TACO philosophy of warfare. 

When President Trump gave his 2-week timeline on when the U.S. “may or may not” be directly joining the aerial bombardment of Iran’s nuclear facilities, he crushed any hopes of Iran’s “civilian” nuclear program ever getting off the ground. 

Depending on which side of the political aisle, you were either praising President Trump’s brilliant restraint and tactical mastery of the art of negotiation, or chiding his cowardice and reaffirming your belief in the TACO philosophy. 

Everyone has an opinion, and here’s the secret — it doesn’t matter what you think of Trump’s latest move to kick the can down the road a bit. 

And you know why? Well, I imagine most of you have heard of the surprise airstrikes delivered by seven B-2 Spirit bombers that decimated both the Fordow and Natanz facilities. 

Everyone was taken by surprise, including yours truly. 

But you know what? 

This was TACO investing at its most profitable, and here’s why…

TACO Investing At Its Most Profitable

As I pointed out last week, this geopolitical chaos is one of the catalysts driving crude prices higher, but it’s not the reason why they’ll stay this high. 

When the gossip started making its rounds that a U.S. air strike was in the works, it was enough to tack a nice premium onto oil prices. 

If Trump followed through with it, Goldman Sachs analysts believed the floor for Brent Crude, which is already trading above $77 per barrel, would climb to $90 per barrel; JP Morgan thought that it was a path to the worst-case scenario, which would push crude prices to multi-year highs above $120 per barrel. 

However, both predictions relied on a pretty severe supply disruption to Iranian crude exports. 

Just think of the number of jaws that dropped from TACO loyalists in surprise once this popped up:

As you probably know, both the B-2 strikes and another attack on the Isfahan nuclear facility by our submarines, most likely obliterated any hope of Iran enriching uranium in the foreseeable future. 

The ONLY question on our minds right now is how Iran will respond. 

Now, I’m not talking about Iran’s foreign ministry condemning the attack (it already did), or threatening President Trump with “everlasting consequences.” 

The attack last Saturday was unprecedented; EVERYONE was expecting President Trump to delay his strikes against those nuclear facilities… kind of like how he delayed tariff deadlines earlier this year. 

This means that Iran’s response had to be unprecedented as well, if only to regain any possible strength in future negotiations. 

Welcome to Goldman Sachs’ and JP Morgan’s worst-case scenario, dear reader. Yesterday, Iran’s parliament voted to close the Strait of Hormuz — ultimately blocking roughly $1 billion in oil shipments every single day. 

I’ll be the first to admit that I didn’t think they would do it. And after decades of similar threats, it’s the Supreme Council’s time to put up or shut up. Remember, it’s the Supreme Council that will make the final decision. 

Personally, I believe this decision is far more symbolic at this point. 

Not only will it meet immense resistance from its OPEC counterparts, and particularly from the Saudis, but it would be interesting to see how long it would be closed once the full weight of the U.S. navy are deployed to open it back up (which is not to mention navies from other allied countries as well). 

For what it’s worth, I still don’t believe Iran is capable of following through on its threat to close the strait, and certainly not for any sustained period of time.

But here’s the dirty little secret regarding this situation — the worst-case scenario IS NOT the closure of the Strait of Hormuz. 

You see, any significant disruption of oil traffic through the strait would mean that Iran’s oil terminals could officially be added to the target list. Remember, nearly all of Iranian oil exports flow out of Kharg Island, which hasn’t been touched… yet. However, even if we entirely wipe out the roughly 2.3 million barrels per day that Iran is exporting right now, it wouldn’t be difficult to bring that many barrels back online; OPEC+ (minus Iran, of course) is more than capable of putting more barrels onto the market if necessary. 

If Kharg Island is on the menu for President Trump and Israeli air strikes, then it’s going to send U.S. oil stocks to the moon. 

And there’s no better way to time your oil profits than now. 

Timing Your Oil Profits

I want you to push aside the geopolitical premium that is attached to oil prices right now. I know it’s not an easy thing to do, but it's necessary if you want to get a clearer picture of what’s really coming up down the pipeline. 

If you’re looking to time the oil market perfectly, I have some bad news for you — you already missed the bottom. Perhaps a few of you might remember when I told you that if you’re not buying oil stocks back in April, then you hate money. 

It was kinda hard NOT to see that buying opportunity, right? Still, a lot of investors missed that window.

The good news is that that disconnect from reality is still lingering about like a bad smell, and it’s only a matter of time before the EIA starts reporting production declines in its monthly reports. Mark my words now, once that happens you’ll know it’s too late and the investment herd will be stampeding back into oil stocks as prices strengthen. 

Why? Because right alongside the lower output we’ll find that demand is still strong. Last week’s EIA This Week in Petroleum report showed a huge inventory draw of 11.5 million barrels, which puts our stockpile at the bottom of the five-year average. 

In fact, over the last month our oil inventories have fallen by 5%, or approximately 22.3 million barrels. 

And to think… The summer driving season is just underway. 

However, there’s more to this than blindly throwing a dart against a wall of oil companies and hoping for the best. 

Here in the U.S., at what may turn out to be the twilight of the shale boom, not all oil drillers were created equal. And here’s a little spoiler: The best profits won’t be from Big Oil. 

In fact, Big Oil has had some of the most lackluster returns for investors since WTI prices bottomed in mid-April. If you decided to put your money in major players like Exxon, Chevron, or ConocoPhillips back when I wrote that piece, you would’ve only seen a 10% reward for your investment. 

Considering WTI crude prices jumped 41% during the same period, that doesn’t inspire much confidence in shareholders. 

Of course, pouring your money into an oil ETF like the Energy Select Sector SPDR Fund (NYSE ARCA: XLE), or even the Vanguard Energy ETF (NYSE ARCA: VDE), you would’ve done just about the same. Aside from the fees and expenses that are added onto these ETFs, both funds are practically holding the same equities — Exxon, Chevron, and ConocoPhillips are the top 3 positions in each!

You can do better than that. 

The same tiny oil driller I mentioned that we were tapping into for bigger oil profits returned 3x the profits as the ones I just mentioned above — with my readers hauling in 31% profits over the same period of time. 

Once you see the bigger picture, it’s like shooting fish in a barrel. 

And the best part is that this tiny oil driller is STILL undervalued and overlooked by Wall Street, even with oil trading above $75 per barrel before President Trump's surprise air strikes.

It’s time you check this investment out for yourself firsthand.

P.S. Palantir turned battlefield AI into a $47 billion empire – handing investors 1,759% gains. Now, under Trump's $5.3 trillion "Golden Dome" missile shield, one overlooked defense contractor is set to repeat history. Its tech is already deployed across over 300 military programs… and it could be the biggest AI stock winner of the decade.