Power Insider: Why the confusion around the Iran situation could get worse. How to profit anyway

Iran-related uncertainty keeps the Strait of Hormuz effectively disrupted, with JPMorgan estimating Iranian exports have collapsed to near zero and the global oil deficit widening to 15-16 million barrels per day. Citi sees Brent averaging about $110 this quarter if flows remain impaired, while the EIA says 7.5 million barrels per day were offline in March and could rise above 9 million. Goldman recommends energy names tied to long-term demand and AI/data center growth, including ConocoPhillips, Chevron, EQT, Vistra and Quanta Services.

Analysis

The market is still pricing this as a binary oil shock, but the bigger second-order effect is duration risk: if Iranian command remains fragmented, the supply problem becomes less about a single reopening event and more about intermittent disruption that keeps freight insurance, time-charter rates, and regional storage premiums elevated for weeks or months. That favors producers with clean U.S. asset bases and low political exposure, while penalizing refiners, chemical names, and any asset-heavy industrials tied to Gulf logistics. The longer the uncertainty lasts, the more capital rotates from “event trades” into durable cash-flow stories tied to domestic power demand.

Goldman’s preferred basket is directionally right, but the best risk/reward likely sits in names levered to both commodity scarcity and structural electrification. EQT is the cleanest way to express tighter U.S. gas markets because the AI/data-center call option is not priced like a base case yet; if gas demand inflects even modestly over the next 6-12 months, the market will re-rate the entire gas complex, not just one operator. By contrast, VST and PWR are more of a second-derivative trade: they benefit if higher power prices force faster buildout and grid spend, which is a slower but more persistent tailwind.

The consensus may be underestimating how little near-term benefit a geopolitical flare-up gives to Europe and Asia if LNG molecules are already constrained by infrastructure, not production. That makes U.S. exporters and the domestic power stack the real winners, while global crude consumers may face only modest relief from any eventual de-escalation because replenishment is time-lagged. The contrarian setup is that a ceasefire extension can still be bearish for crude vols even if headlines remain noisy; if the market starts believing the worst-case interruption is being managed, implied volatility could compress faster than spot, creating good premium-selling opportunities.

Key Decisions for Investors

• Long EQT vs short XLE for 1-3 months: express the view that U.S. gas re-rates on AI/power demand while integrated energy stays capped by crude volatility; target 15-20% relative outperformance if gas forwards firm.
• Buy COP on pullbacks over the next 2-4 weeks, but hedge with a short position in a Gulf-exposed logistics/transport basket: COP offers cleaner U.S. project optionality, while logistics names are exposed to a longer-than-expected Strait disruption.
• Long VST call spreads 3-6 months out: position for a delayed but meaningful repricing of merchant power if data-center load assumptions keep ratcheting higher; structure caps cost while preserving upside to a fast rerate.
• Initiate a small long PWR position, paired against an industrials basket, for a 6-12 month horizon: grid buildout is the underappreciated bottleneck, and PWR is a direct beneficiary if capital spend accelerates.
• Sell near-dated crude volatility if Brent spikes on headlines but shipping data stabilize: the market is likely overpaying for event risk once it believes outages are intermittent rather than escalating.