Why the confusion around the Iran situation could get worse. How to profit anyway
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The Strait of Hormuz was opened. The Strait of Hormuz was closed. That pretty much sums up the last 72 hours of news regarding Iran and the Middle East’s most critical waterway. The news flow went from good (record highs for stocks!) to not-so-good (JD Vance’s trip postponed!).
If it seems contradictory, that’s because it is. What I have been reporting for more than a month was confirmed by President Trump late Tuesday: There may be no cohesive force overseeing Iran’s government or decision-making. As of Tuesday, Trump extended the ceasefire in Iran but acknowledged that the government was “severely fragmented.”
This shouldn’t come as a surprise to anyone who’s watched “Power Lunch.” As viewers know, I’ve quoted extensively from sources who say there are two or more parties claiming control over Iran. While President Trump and his envoys are negotiating with one group, the Ayatollah’s group and the Revolutionary Guard claim to maintain control of the military force.
That’s why you can read news about a ceasefire one day, and the opening of fire on ships the next day.
WHAT I GOT → My sources add that it is not entirely clear who actually “rules” Iran. There may be two or more groups, each of whom wants the world to believe that they are the ones calling the shots – sometimes literally. Iran could face a long and painful civil war for control as the ceasefire extension takes much longer than oil and stock markets expect.
JPMorgan analyst Natasha Kaneva recently dropped a dose of reality on clients. He states that the current situation is getting worse rather than improving with the oil supply. Kaneva writes that non-Iranian exports from the Persian Gulf have remained generally stable since the beginning of the blockade, but Iranian exports of about 2 million barrels per day “have fallen to almost zero.” He said this halting of Iranian oil flows meant that the pre-blockade supply deficit of around 14 million barrels per day was “probably widening to a deficit of 15-16 million barrels”, but added that this range reflected “the fact that ship tracking estimates are frequently revised”.
Trying to understand who rules Iran is almost as confusing as predicting the world’s energy flows.
JPMorgan has its own idea. The US Energy Information Administration (EIA) believes that 7.5 million barrels of oil per day were offline (known as ‘shut-ins’) in March and that this number could rise to over 9 million.
Citigroup is also trying to plan for every scenario. The company states that if the oil flow in the Strait of Hormuz remains problematic later in the spring, the total supply loss could reach up to 1.3 billion barrels. The Citi team, led by Max Layton and Francisco Martoccia, will see Brent crude oil prices averaging around $110 this quarter, falling to $80 in the fourth quarter. But Citi is optimistic and thinks some kind of agreement will eventually be reached.
WHAT I GOT → Without an agreement to open the Strait of Hormuz, the world will continue to have an oil deficit of 13 to 15 million barrels per day.
So what should a stock investor do? Goldman Sachs says keep calm and invest.
Whatever the end result in Iran, analysts Neil Mehta says investors should focus on a few companies that will benefit from long-term trends around the growth of energy demand, data centers and artificial intelligence demand.
Mehta loves ConocoPhillips (COP) as one of the big oil plays. He projects an estimated 21% total return on the stock over the next 12 months as the company benefits from a surge in four major new projects, including the massive Willow initiative in Alaska.
However, investors should not forget that ConocoPhillips is an investor in QatarLNG, which was recently hit in the Iran war. Mehta isn’t letting that deter him from recommending the stock, and a few weeks ago CEO Ryan Lance told us in a CNBC interview that the damage wouldn’t have a major material impact on its results.
Goldman Sachs also has a buy rating Ribbon (CVX).
based in pittsburgh EQT (EQT) is seen as the winner. The Goldman team has a target of $56 to $68 per share today for Toby Rice’s natural gas giant. Mehta’s team says EQT “stands out” among natural gas-focused producers. (See my conversation with Toby Toby below.)
It’s not just about fueling energy accumulation. It’s also about generating power and getting it where it needs to be. With that in mind, the Goldman team also likes the buy rating Vista (VST) And Quanta Services (PWR). Vistra shares are bullish on any price gains, and Quanta is showing the kind of earnings growth the Goldman team likes.
I’m not ashamed to admit that the news feed can be confusing, and neither should you. The final result is uncertain.
WHAT I GOT → One thing is clear: Savvy investors need to focus and think about American energy in terms of years, not months. Energy is the original long game.
Inside Line: EQT CEO Toby Rice
Interviews with people in energy
EQT CEO Toby Rice speaks at the Pennsylvania Energy and Innovation Summit 2025 at Carnegie Mellon University in Pittsburgh on July 15, 2025.
David A. Grogan | CNBC
Brian: Hello Toby and thank you for answering some Power Insider questions. Are you surprised that natural gas is still below $3 in America?
Toby: Not really. What we’ve seen over the last few weeks is the power of U.S. energy independence. We (the United States) are the largest producer of natural gas in the world, and this has protected Americans from geopolitical shocks around the world. But take it away. Demand is growing rapidly and supply discipline is real. This combination generally does not keep prices low for long.
Brian: America’s natural gas production has nearly doubled in the last 25 years. It’s currently over 1 trillion cubic feet per year. Do you think we can continue to grow from here or have we reached the maximum?
Toby: Thanks to the shale gas revolution, we have discovered an amount of energy that will allow us to increase production by 50% from today’s levels, creating a surplus of 60 Bcf per day for Americans. This is the energy equivalent of 10 billion barrels of energy loss per day. Our ability to seize this opportunity under our feet depends on our ability to build on the surface.
Brian: The demand statistics for energy and natural gas for data centers are truly striking. Can the country really achieve all of these, or will some of them fade away?
Toby: Generating energy has never been more important in this country; whether it’s lowering America’s energy bills, winning the AI race in the West, or providing energy security to our allies around the world. According to our estimates, we will see an increase of around 30-40 percent in natural gas. Therefore, being in this sector has never been more exciting as we transform our energy independence into energy dominance. So Americans have the lowest energy bills, we’re winning the AI race, and our allies’ energy security is bulletproof.
Brian: Let’s have some fun. In a few years, Toby Rice will be Secretary of Energy. What’s the first big move on your agenda?
Toby: It’s hard to top what Chris Wright has done. He has been a strong voice focusing on the affordability and reliability aspects of our energy systems. I would probably pick up where he left off and continue to expand America’s energy advantage. Then we raise our heads and demonstrate this advantage globally. We need to continue to focus on keeping energy affordable and reliable in America. And let’s also touch on the biggest energy challenge this world faces: billions of people around the world who still lack reliable access. That’s why I’ll work to make American energy a bigger part of that solution, providing energy to those who need it most and helping lift billions of people out of poverty.
Random but interesting
In just 25 years, natural gas production in the United States has doubled.
Grill
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