Occidental Petroleum (NYSE: OXY) and Energy Transfer (NYSE: ET) are both energy companies.
Either one would give you exposure to the sector, but their businesses are dramatically different
The geopolitical conflict in the Middle East has once again highlighted the world’s reliance on oil and natural gas. However, it has also highlighted the importance of understanding how the energy stocks you own make money. Why you should have energy exposure in your portfolio The geopolitical conflict in the Middle East has upended the normal flow of oil and natural gas.
The Strait of Hormuz, a key transit chokepoint, has effectively been shut down. It is estimated that around 20% of the world’s oil and natural gas flows through the strait, so supply is severely constrained right now. Since oil and natural gas are commodities driven by supply and demand, reduced supply has led to rising prices.