In recent weeks the possible invasion of Ukraine has plagued the news, with big time stocks like Tesla, Lucid Group and Roblox all down over 18% this week. It is safe to say that in this volatile and unpredictable market, there is not much one can do to make money. With world leaders like Putin who have the ability to move the market in either direction with just a couple words, investors all around the world are frightened. Just last week, Vladimir Putin stated that he would start to withdraw troops from the Ukrainian border. This caused an immediate uprise for most stocks, except for oil and energy related stocks. Why is this so? one might ask. The simple answer is oil supply. With Russia being the US’s third largest crude oil exporter, it is inevitable that if war breaks out, Russia will not be able to supply the same amount of oil. This vast decrease in oil exports will raise the demand for oil, ultimately causing oil related stocks to skyrocket. This increase in oil is slowly but surely happening right in front of our eyes, as oil is reaching near $102 a barrel. The last time the price of oil per barrel was anywhere near these highs was during the financial crisis of 2008.
Keeping this information in mind, certain oil stocks that could surge in the unfortunate event of invasion are Conocophillips and Exxon Mobil. One factor that makes Conocophillips a company to look after is the diversity their operation brings. Considering that Conoco has operations in over 14 countries, possible conflicts like this war would not have as much of an impact on them, compared to other single country based companies. Moving on to Exxon Mobil, with the addition of gas fields in P’nyang which they agreed to use as an exporting source, the company will now doubt see an increase in exports. In fact, last year this very plant that ExxonMobil will now be utilizing produced over 8.4 liquid tons of gas last year.
Sadly with this bear market caused by factors ranging from inflation to war, there are not many investors seeing massive gains. If anyone was to take a gamble and bet on or against a possible war between Russia and Ukraine, it would be smart to do so with oil. If an invasion does occur oil prices would surge to around $120 a barrel, and if the conflict was to be de-escalated, puts on these companies bring in massive profit considering many oil companies are still fluctuating near 52 week highs.