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The Strait of Hormuz is open. The Strait of Hormuz is closed. That pretty much sums up the last 72 hours of news around Iran and the Middle East’s most critical waterway. The news flow has gone from good (record highs for stocks!) to not so good (JD Vance’s trip is delayed!).
If it seems conflicted it’s because it is. What I have been reporting for over a month was confirmed by President Trump late Tuesday: there may not be a cohesive force overseeing Iran’s government or decision making. As of Tuesday, Trump did extend the Iran ceasefire, but conceded that the government is “seriously fractured.”
This should not come as a surprise to anyone watching “Power Lunch.” As viewers know, I have extensively cited sources saying that there are two – or more – parties claiming control over Iran. President Trump and his envoys are negotiating with one group, while the Ayatollah’s faction and its Revolutionary Guard military force assert that they retain control.
It’s why you may read about the ceasefire one day, and the ships being fired upon the next.
MY TAKE → My sources add that it is not clear who exactly is truly “running” Iran. It may be two factions, or more, with each one wanting the world to believe they are the ones calling the shots – sometimes literally. Iran may be in for a long, painful internal battle for control with this ceasefire extension taking much longer than the oil and stock markets expect.
JPMorgan analyst Natasha Kaneva recently dropped a dose of reality on clients. She notes that with the oil supply, the current picture has gotten worse, not better. Kaneva writes that since the start of the blockade, non-Iranian exports from the Persian Gulf have remained broadly stable, but about 2 million barrels per day of Iranian exports have “collapsed to near zero.” She adds that this stoppage of Iranian oil flows implies that a pre-blockade supply shortfall of about 14 million barrels per day “has likely widened to a 15-16mbd deficit,” albeit adding that the range reflects “the fact that ship-tracking estimates are often revised.”
Trying to figure out who’s running Iran is almost as confusing as estimating the world’s energy flow.
JPMorgan has its take. The U.S. Energy Information Administration (EIA) believes that 7.5 million barrels per day of oil per day were offline – known as being ‘shut in – in March, and that could rise to over 9 million.
Citigroup is also on the tape, trying to plan for every scenario. The firm notes that if Strait of Hormuz oil flows stay problematic later into the spring, the total supply loss could be as much as 1.3 billion barrels. The Citi team, led by Max Layton and Francisco Martoccia, would then see Brent crude prices averaging around $110 this quarter before falling back to $80 in the fourth quarter. Citi leans optimistic, however, thinking that some kind of deal will be struck eventually.
MY TAKE → Without a deal that opens up the Strait of Hormuz, the world will keep being short about 13 million to 15 million barrels per of oil per day.
So what’s a stock investor to do? Stay calm and invest on, says Goldman Sachs.
Analyst Neil Mehta says, regardless of the ultimate outcome around Iran, investors need to focus on a few companies that will benefit from longer-term trends around energy demand and the growth of data centers and A.I. demand.
Mehta likes ConocoPhillips (COP) as one of his big-cap oil plays. He sees an estimated 21% total return over the next 12 months on the stock as the company benefits from a boost in four big new projects, including the huge Willow endeavor in Alaska.
Investors do, however, need to note that ConocoPhillips is an investor in QatarLNG, which was recently hit by strikes in the Iran war. Mehta doesn’t let this 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 huge material impact on his results.
Goldman Sachs also has a buy rating on Chevron (CVX).
Pittsburgh-based EQT (EQT) is seen as a winner. The Goldman team has a $68 target on Toby Rice’s natural gas giant, up from the $56 a share its trading today. 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 the energy buildout. It’s also about producing power and getting it where it needs to be. With that in mind, the Goldman team also likes buy-rated Vistra (VST) and Quanta Services (PWR). Vistra stock has upside to any price move higher, and Quanta is exhibiting the kind of earnings growth that the Goldman team loves.
I’m not embarrassed to admit that the news flow can be confusing, and neither should you. The ultimate outcome is unclear.
MY TAKE → One thing is clear: Savvy investors need to stay focused and think about American energy in terms of years, not months. Energy is the original long game.
Inside Line: Toby Rice CEO of EQT
Conversations with energy insiders
Toby Rice, CEO of EQT, speaks during the Pennsylvania Energy And Innovation Summit 2025 at Carnegie Mellon University in Pittsburgh on July 15, 2025.
David A. Grogan | CNBC
Brian: Hi Toby and thank you for answering some Power Insider questions. Are you surprised that natural gas is still under $3 here in America?
Toby: Not really. What we have seen over the last couple of weeks is the power of U.S. energy independence. We (the U.S.) are the largest producer of natural gas in the world and that has protected Americans from geopolitical shocks around the globe. But zoom out. Demand is building fast and supply discipline is real. That combination doesn’t usually keep prices low for long.
Brian: American natural gas production has nearly doubled in the last 25 years. It’s now over 1 trillion cubic feet per year. Do you think we can keep growing from here or have we maxed out?
Toby: Thanks to the shale revolution, we’ve discovered an amount of energy that would enable us to increase production an incremental 50% from today’s levels, creating a 60 Bcf/d of surplus for Americans. That’s the energy equivalent of adding 10 billion barrels a day of lost cost energy. Our ability to capture this opportunity under our feet is dependent on our ability to build on the surface.
Brian: The demand stats around energy and nat gas for data centers are just stunning. Can the country really make them all happen or are some going to fizzle out?
Toby: It’s never been more important to produce energy in this country – whether lowering American energy bills, winning the AI race in the West or providing energy security to our allies around the globe. By our estimates, we are going to see a 30-40% increase in natural gas. So it’s also never been more exciting to be in this industry as we translate our energy independence into energy dominance. Meaning Americans have the lowest energy bills, we win the AI race and our allies’ energy security is bullet proof.
Brian: Let’s have some fun. In a few years Toby Rice is the Secretary of Energy. What’s the first major move on his agenda?
Toby: Hard to top what Chris Wright has done. He’s been a strong voice centered on the affordability and reliability aspects of our energy systems. I’d probably pick up where he left off and continue to increase the scale of America’s energy advantage. Then would pick our heads up and push that advantage out globally. We need to continue our focus on keeping energy in America affordable and reliable. And then also address the biggest energy issue this world faces – the billions of people around the globe who still don’t have reliable access. So I’d look towards making American energy a bigger part of that solution, providing energy to those who need it most and helping to lift those billions out of poverty.
Random, but interesting
In just 25 years, U.S. natural gas production in the U.S. has doubled.
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