With the Strait of Hormuz currently closed and the threat of ongoing attacks on energy infrastructure in the Persian Gulf and the Gulf of Oman, and the price of oil almost $100 a barrel at the time of writing, investors have inevitably started looking at which energy-related stocks might help protect a portfolio from headline risk. I have two ideas.
It’s important to pause for a few seconds and consider the bigger picture. For example, the obvious way to invest in such an environment is to buy U.S. oil producers that will benefit from higher prices without facing supply issues. Moving beyond that, there’s also the potential for structural damage to energy infrastructure in the Gulf and the instability’s impact on the willingness or cost of investing in energy assets in the region.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Oil captures the headlines, and understandably so, because according to the International Energy Agency (IEA), 34% of global crude oil trade went through the Strait in 2025. Still, according to the U.S. Energy Information Administration (EIA), 20% of global liquefied natural gas (LNG) flows through the Strait , and LNG flowing through the Strait accounts for 27% of Asia’s LNG imports.
It gets worse. Natural gas is the primary raw material used to make fertilizers such as urea and ammonium nitrate, and fertilizer prices have soared this year. Countries like India, China, and Australia are highly reliant on fertilizers or materials (sulfur) used to make fertilizers that pass through the Strait.
From these observations, it’s clear that buying U.S.-focused producers of raw materials used to make fertilizers, such as CF Industries (NYSE: CF), makes sense. The company has six manufacturing facilities in the U.S., two in Canada, and one in the U.K. It’s the world’s largest producer of ammonia (used to make fertilizers) and a major producer of urea.
Its access to North American gas means it’s not exposed to supply instability, and it’s well placed to help fill the gap created by the lack of fertilizer coming through the Strait.
As you can see below, CF Industries’ share price has surged (alongside Australia’s Woodside Energy Group (NYSE: WDS)) amid mounting tensions, and investors might want to wait for a better entry point. Still, if the issues around tight fertilizer supply persist, CF Industries has significant upside potential. With the current market at $19.3 billion and $1.8 billion in free cash flow generated in 2025, CF Industries remains a decent value for investors concerned about persistent conflict in the Gulf.
