Iran Vows “Severe Revenge”
As most Americans went to bed Thursday night President Donald Trump ordered a drone strike killing Iran’s Gen. Qassem Soleimani, leader of the powerful Quds Force of Iran’s Revolutionary Guard, outside the Baghdad airport.
U.S. Secretary of State Mike Pompeo called the strike a preemptive move made in order to stop an imminent threat to Americans in Iraq.
Iraqi Prime Minister Adel Abdul-Mahdi condemned the action, calling it a breach of sovereignty, and Iran’s leader Ayatollah Khamenei vowed “severe retaliation” for the killing, as reported by Bloomberg.
The news was more than enough to stall our new year rally. In early action all three major indexes were down about 1% today.
European stocks also slumped, as reported by The Wall Street Journal this morning.
We’re living in unpredictable times with an unpredictable leader at the helm. This proxy war could go on for a long time. It could even go hot.
That said, I’ll leave the deeper political analysis for others. Today, I want to share the market moves I’m considering as the doomsday clock ticks closer to midnight.
Oil Futures Surge on Uncertainty
Oil futures soared this morning. Both the Brent Crude and West Texas Intermediate indexes shot up nearly 4%.
Notably, however, the OPEC basket was barely up a tenth of a point.
This speaks to an opportunity we’ve discussed in response to other geopolitical events that could potentially impact the world’s oil supply.
American Oil Is Insulated From This Proxy War
The U.S. is in a better position than most other major oil-consuming countries to weather events in the Middle East.
Things are a mess in the Gulf region, but U.S. gas and oil production have been humming along. The U.S., against all odds, has even become a net exporter of oil.
We can’t emphasize how big a deal this is. Especially in light of this morning’s events.
It’s All Thanks to Technology
America owes its newfound energy independence to the new technologies coming online over the past decade. These technologies have allowed the extraction of oil from previously untappable resources. These include deeper, harder-to-find reserves, as well as previously untapped areas like our shale reserves.
And it’s this technology that allows American companies to produce oil up to three times more efficiently than the Saudis, Iranians or anyone else for that matter.
If we continue to see more back-and-forth retalitations — or heaven forbid we find ourselves in a hot war with Iran — American oil producers and related pick-and-shovel plays could offer a profit boom for savvy investors.
We’ve already covered some of these ideas like cyber network security companies that keep us safe from Iranian hackers. (Click here if you missed it.)
We’ll dive deeper into those ideas as this story continues to develop.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily