by Lance Roberts
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| Right now, everyone is focused on the Strait of Hormuz closure → supply disruption → higher #crudeoil prices. But the real risk is not the shortage. It’s the snapback that follows. During the disruption, oil production doesn’t disappear — it’s temporarily shut in, while other producers ramp up output to capitalize on higher prices. As a result, there is hidden supply building in the background. Once the Strait reopens, all that delayed + increased production floods back into the market. The system flips from shortage to oversupply. That’s classic commodity behavior: high prices → more production, more production → eventual glut → price collapse. So, oil prices likely to revert lower, while energy stocks face downside pressure as margins compress. Beware that the current strength in oil and energy equities may be late-cycle, not early, so take profits rather than chase upside. Now, what markets actually care about is not oil. It’s corporate earnings and forward expectations. As long as those are strong and rising, stocks will hold up despite geopolitical stress. The only scenario that changes everything is if the Strait closure lasts 2–4+ more months. At that point, higher energy costs begin to really hit consumers, demand weakens, and global growth slows. That’s when the narrative shifts from “temporary disruption” to “economic damage”. Until then, the oil spike isn’t the real trade. The focus should remain on earnings growth, not fear-driven narratives. 📺Full episode: Catch Lance Roberts daily on The Real Investment Show: https://www.youtube.com/@TheRealInvestmentShow |
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🔎 At a Glance 💬 Ask a Question Have a question about the markets, your portfolio, or a topic you’d like us to cover in a future newsletter? 📩 Email: [email protected]🐦 Follow & DM on X: @LanceRoberts📰 Subscribe on Substack: @LanceRoberts We read every message and may feature your question in next week’s issue! 🏛️ …
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