How to prepare your stock portfolio for war
Subscribe to enjoy similar stories. Last week, we witnessed unprecedented escalation in the Gaza war as Iran officially entered the fray, launching 180 missiles at Israel. This opens the door to potential retaliatory strikes from Israel, while Lebanon is already feeling the heat.
Until now, Indian financial markets were largely unaffected by the wars in Ukraine and Gaza. But last week marked a turning point, as Indian benchmark indices dropped during all four trading sessions. Global oil markets, which had been relatively stable for over a year, began to show signs of distress, with WTI (Western Texas Intermediate) crude oil jumping 11.5% in just one week.
In this piece, I’ll use the cause-and-effect theory, along with my 360 degree worldview of market analysis, to explain what’s happening, why it matters, and how it might impact your equity investments. Veteran oil and gas traders know that navigating the energy markets requires more than just understanding supply-demand dynamics, chart reading, and statistical analysis. Successful trading also demands an in-depth grasp of geopolitics and intelligence gathering, both human (Hum-Int) and open-source (Os-Int).
Inevitably, an element of “guesstimation" comes into play. Iran is a heavyweight in the global oil and gas landscape, holding the third-largest oil reserves (approximately 12% of the world’s total) and the second-largest natural gas reserves. Its oil is light and sweet, and its natural gas is of high calorific value.
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