Resultant Effect of Possible Iranian War on Oil price

As we all know, Iran is presently unsettled with coalitions against them from Saudi Arabia and Israel with support from other nations including USA, Egypt, Jordan and United Arab Emirates. The reason for the coalition is as a result of accusations against Iran for fueling regional conflicts by supporting armed Shia movements in Syria, Iraq, Yemen and Bahrain.

With the way things are going, there might be military escalations in the nearest future as Saudi Arabia, Israel, USA would not accept anything other than than a complete retreat of Iran from the Arabian Peninsula but Iran has no intentions of retreating. If a war breaks out finally, it would have a ripple effect on various economies as Iran would most likely halt oil production during the period of the war. The resultant effect would be to reduce the oil supply considerably (Iran produces an average of 3.6million b/d) thereby leading to an increase in oil prices.

Other Oil producers outside of the OPEC like Russia and the United States of America would be advocating for a war as they stand to benefit greatly if Iranian oil production is disrupted. The key takeaway is that with the way things are going, the possibility of a war breaking out is very high with Iran remaining adamant. Infact to show how intense it is, neighboring countries with soft spots or being neutral with respect to Iran are finding themselves in the heat, for example Qatar is perceived as having softness for Iran and interfering with the affairs of other Arab countries. In line with this, Saudi Arabia, UAE, Bahrain and Egypt are still imposing restrictions on trade, travel, communication and diplomatic ties.

So with the above, it might be time to look into those oil and gas related US stocks because if Iran oil production is cut off, the value of oil and gas stocks may double or triple with oil supply falling considerably and oil price rising to increase the earnings of these firms.