Today, I (Chris Lowe) am shining the spotlight on the spike in oil prices following Russia’s invasion of Ukraine… and how you can profit.
To grasp how momentous that move has been, I want you to first cast your mind back to October 6, 1973. That’s when Egypt and Syria triggered the Yom Kippur War with surprise attacks on Israeli forces in the Sinai Peninsula and the Golan Heights.
Six days later, President Nixon greenlit a U.S. Air Force airlift operation codenamed Nickel Grass.
It supplied the Israelis with 22,325 tons of tanks, artillery, and ammunition.
And oil-exporting Arab nations hit back by making good on their threat to use oil as a “weapon” of war.
They choked off exports to the U.S… and all hell broke loose.
From the start of January 1970 to the end of April 1974, it skyrocketed 547%.
Things got so bad, the U.S. started running out of gasoline.
Signs at gas stations across the country appeared saying, “Sorry no gas.”
Gas station owner in 1973 creates a “Sorry no gas” sign.
Source: Tulsa World
In 2022, we’re not at that point… yet.
But as I’ll show you today, the rise in oil prices we’re seeing now is on the same scale as it was during the 1973 shock.
And this time, it’s not just oil prices that are going through the roof due to war.
It’s a full-on “commodities shock.”
And just like in the 1970s… the fallout will be higher inflation.
But you don’t have to be a victim. Our commodities expert, Dave Forest, has a proven strategy that can shield you from the rising cost of living.
As his paid-up readers recently learned, it’s also an opportunity to grow your wealth as the commodities shock slams the economy.
It’s of the oil price going back to 1970. It comes by way of Bloomberg columnist John Authers.
And because it’s based on end-of-month prices, he used a red arrow to show where the price reached during trading yesterday.
As you can see, in percentage terms, the recent shock to oil prices is even bigger than the one following the Yom Kippur War.
And once again, the driver is the weaponization of oil.
Yesterday, President Biden announced that the U.S. would ban imports of Russian oil in retaliation for Vladimir Putin’s war in Ukraine.
The British government says it will phase out Russian oil imports at the end of the year.
And Putin has threatened a tit-for-tat ban on all Russian oil exports to the West.
That’s bad news for consumers… especially if you use your car a lot.
It’s helped drive the average national price of gasoline to its highest level ever – $4.17 a gallon. (The prior record was $4.11 in July 2008, during the last big spike in oil.)
Just ask paid-up subscribers of our Strategic Investor advisory.
It’s where Dave uses his decades of experience as a natural resource speculator and crisis investor to uncover the world’s most profitable investment opportunities.
Last Friday, he recommended his readers take a “free ride” on oil-and-gas explorer Occidental Petroleum (OXY) stock warrants after they shot up 941% from his entry price.
That’s when he urges his readers to sell enough shares to cover their initial stakes… and take a risk-free ride on the rest of their positions.
Here’s how he described the opportunity on October 21, 2020, when he recommended OXY…
Even though it looks like the oil industry is on its last legs today, oil consumption isn’t going away anytime soon. In fact, as contrarians at Strategic Investor, today may be one of the best times to speculate on a turnaround in the oil patch.
That’s why we’re zeroing in on Occidental warrants. They’re a long-term bet on a recovery in oil. They also give us massive upside with limited downside.
It’s the perfect example of Dave’s warrants strategy: Make a small speculation… and watch it explode higher.
As we showed you here, warrants are an overlooked investment type that billionaires like to use to speculate on rising stock prices.
And they’re great “asymmetric bets.” Their potential payoff is way higher than their downside risk.
When Dave recommended the Occidental warrants, they cost about a third of the price of regular shares in the company. And they surged 10x higher.
Dave is one of few newsletter writers who publish research and recommendations on warrants.
But don’t worry if you’re not already a subscriber.
You can simply buy shares of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
It allows you to invest in a basket of top oil-and-gas exploration stocks, including OXY, through your regular broker for a fee of 0.35%.
We’re now two weeks into Russia’s assault on Ukraine. Ukrainians are doggedly resisting.
And even if Russia achieves its military goals… and occupies its neighbor… it’s hard to see the oil market getting back to normal anytime soon.
Russia would have to try to quell a Ukrainian revolt… much like the one U.S. forces faced in Iraq.
Oil markets will stay scrambled as a result… and oil stocks will benefit.
Here’s how Dave explained it to me in an email yesterday…
The world didn’t realize it. But Russia is a big deal when it comes to natural resources. Its oil production rivals oil cartel OPEC (Organization of the Petroleum Exporting Countries). And it’s Europe’s largest natural gas supplier.
But that just scratches the surface. It’s also the world’s second-largest producer of potash fertilizer. And together, Russia and Ukraine account for about a quarter of the world’s wheat supply.
So if you eat food, this war affects you.Russia is also the largest producer of palladium. It’s key “hard tech” [the hard assets that go into tech] that goes into cars and trucks. It primarily goes into catalytic converters.
And the nickel price spiked 300% this week. That’s also a direct result of Russia choking off supply. Nickel is necessary for steelmaking. It also goes into the rechargeable batteries that power electric vehicles.
In short, Russia is a key source of some of the building blocks of modern society. Dave again…
If you’re not watching commodities, you’re missing the world’s biggest financial story right now. After months of doldrums, even gold is spiking. Russia is a top-five producer of gold. Without it, supply will fall into disarray.
So keep watching this space. It’s only getting more disruptive. And the gains will only get bigger.
In addition to being an ace speculator, he’s also a professional geologist and mining entrepreneur.
And he’s checking out a copper mine and a gold mine in this former Soviet republic.
I have a call scheduled with him later today. I’ll make sure to ask him about other ways to profit as commodities and inflation climb higher.
I’ll report back on what he tells me…
Until tomorrow…
Chris Lowe
March 9, 2022