Middle East Tensions Fuel Surge in Renewable Energy ETFs
Tensions in the Middle East have escalated as the United States signals large-scale military strikes against Iran and Yemen's Houthi rebels. The blockade of the Strait of Hormuz continues, and signs emerge that the Red Sea detour route could also be cut off, driving up international oil prices.
This surge has sent returns on renewable energy and crude oil exchange-traded funds (ETFs) soaring in the domestic stock market. Renewable energy-related ETFs dominated the top of the return rankings over the past week (July 17-24), with PLUS Solar & ESS rising 20.65% to record the highest return.
Crude oil ETFs, which invest in rising international oil prices, also showed strength, with KODEX WTI Crude Oil Futures (H) rising 15.54%, and TIGER Crude Oil Futures Enhanced (H) gaining 15.48%. Global investment bank Goldman Sachs forecast that Brent crude prices could exceed $120 per barrel in the fourth quarter of this year if disruptions to navigation through the Bab-el-Mandeb Strait continue.