Brian Kersmanc

We were actually fairly constructive on energy even before any of this started.

And one of our thoughts were that we came into this year expecting that there would be a little bit of a supply glut in energy, in crude oil specifically.

It was our view that a lot of the consolidated base of the energy companies globally, especially the swing producers in the US, were actually slowing things down in terms of you saw rig counts coming down.

You saw people sort of adjusting for that oversupply that was supposed to happen this year into next year.

And you had some really high quality operators that are going to put up extremely strong earnings, even at a $60 a barrel sort of price tag.

What you can definitively say is even if the straight magically opened tomorrow, and we did get everything logistically firing back on all cylinders, so to speak, you're seeing a situation where it's probably an $80 plus environment, the glut is gone.

So even now, when you kind of look back at the companies that you're talking about, like an Exxon, for example,

that even if the price of oil stays at $65 a barrel, they're going to be able to do almost 20% total return, 13% in terms of EPS growth or in terms of a CAGR over the next couple of years.

That looks really attractive either way.

To get to your question more directly, though, in terms of the Strait being open or not, I think one of the things that we have seen come out of this is that Iran can talk about the closure of the Strait

And there's almost this asymmetric impact of having that information.

Because just the talk about closing the straight back down sends insurance prices through the roof.

It talks about the shipping slowing down and folks not necessarily wanting to send freighters back into the straight, regardless of how many are getting out at this point in time.

So there's a lot of logistical challenges.

And I think, ostensibly, you could talk about supply being constrained for a bit longer than what we're sort of expecting with the market is priced in.

Yeah, what I think is the case at this point is that you probably do have a higher floor.

So number one, you took out that supply that we were talking about, and then the price of that oil permanently should be a little bit higher.

There should be some level of risk premium, so to speak, that you have to sort of compensate for, for getting that oil out of the Persian Gulf.

A lot of the energy companies, for example, that we talk to when they go to contract ships, they're not necessarily sending ships in.

Anytime soon, they're going to wait several months to wait to see if there's more clarity in terms of that.