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Stock of the day
Karoon Energy
Rising geopolitical tensions in the Middle East propel Karoon Energy to significant gains, as oil prices surge due to the potential closure of the Strait of Hormuz.
(AI video summary)
This video was created on 2 March 2026 for IG audiences by ausbiz.
ASX code: KAR
Market impact and global tensions
Karoon Energy stands out amid rising geopolitical tensions in the Middle East. Recent events, including an attack and the assassination of Iran's Supreme Leader Ali Khamenei, have led to concerns over global oil supply, causing spikes in oil and gold prices and a rally in oil stocks.
Strait of Hormuz and oil concerns
The closure of the Strait of Hormuz, which carries 20% to 25% of the world's oil, has intensified fears. Recent strikes by the United States (US) and Israel on Iran have heightened uncertainty, with warnings of a dual supply shock potentially stalling Organisation of the Petroleum Exporting Countries' (OPEC) spare capacity and halting exports. Predictions are that oil prices could reach between US$102 and US$150 per barrel if tensions continue.
Investment outlook
Karoon Energy, highly leveraged to oil prices, saw a 17.5% gain in early trade, settling around 14%. Analysts cite its effective cost management and production growth. The company's price-to-earnings (P/E) ratio is about 13 times, expected to drop to seven times next year due to projected growth.
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