Game of Oil & Energy

Game of Oil & Energy

Oil and energy remain at the center of global geopolitics. Many believe that control over global energy resources helps maintain the dominance of the U.S. dollar and the United States’ position as the world’s leading economic power. Concerns about sustaining this position in the future are often linked to policies such as “America First”.

In recent years we have seen tariff wars and geopolitical developments involving regions like Venezuela and Iran. Some analysts believe that influence over key energy-producing regions is part of a broader strategy. Historically, strong influence over Iran has been considered strategically important because of its position in the global oil and energy system.

Many observers argue that tensions with Iran are not only about support for Israel but also about control and stability of oil supply. The Middle East is indirectly involved in this larger energy equation. Due to these tensions, even the UAE’s perception as a “safe haven” has occasionally faced questions in global discussions.

However, the UAE government continues to act proactively to protect the interests of residents, investors, and tourists, which is commendable.

Equity Markets

The turbulence in global equity markets is not only due to U.S.–Iran tensions. A major factor is rising oil prices and energy-driven inflation, which can continue to create pressure for some time.

Indian Equity Markets

Indian markets have faced pressure since September 2024.

• First phase: Pressure due to global tariff wars and trade tensions.

• Second phase: Current pressure driven by geopolitical tensions involving the U.S. and Iran.

These developments may disturb the entire oil and energy ecosystem. Even if geopolitical tensions stabilize in the next 2–4 weeks, disruptions in oil and energy supply may take longer to normalize.

Since India is a major importer of crude oil, higher oil prices can increase inflation and create volatility in equity markets.

Investor Perspective

However, history over the last 15–20 years shows that the biggest beneficiaries of such periods of volatility are disciplined long-term investors. Those who continue investing with patience and consistency often benefit the most once markets stabilize and growth resumes.

Staying focused on long-term fundamentals and maintaining disciplined investment behavior remains the key for successful wealth creation.

Akshay Tiwari
www.nextportfolioindia.com

AMFI Registered Mutual Fund Distributor