At a time when geopolitical tensions have escalated thanks to the US-Iran conflict, investment research firm Quantum Strategy is adjusting its portfolio and has given a detailed note on how the firm is recalibrating its portfolio in the wake of recent global events.
In its latest note, Quantum Strategy has forecasted substantial disruptions to global supplies and a prolonged war. As such, the firm is reinstating its position on Brent Crude while increasing its allocation to gold and other hard assets by 10%. Quantum is particularly avoiding the US dollar as a safe haven, instead opting for the Australian and Singaporean dollars.
As far as equities are concerned, Quantum remains globally underweight or short. However, the firm has long positions in China, India and the rest of Asia.
This comes on the back of a chaotic 24 hours in the conflict, which witnessed the demise of Iranian leader Ayatollah Ali Khamenei. The firm noted that Iran's strategy involves widening the war to neighbouring Gulf states in an attempt to maximise global disruption.
ALSO READ: Iran War Live Updates: US Destroys IRGC Headquarters, Israel Hits Tehran, Lebanon
Unconfirmed satellite imagery indicates that Iran's critical Kharg Islands oil facilities have been flattened and Bandar Abbas severely damaged, potentially knocking out the country's oil exports for 18 to 24 months.
Meanwhile, the Strait of Hormuz is now effectively closed, thereby cutting off 20% of the global oil supply. This composure is compounded by soaring shipping costs with Baltic TD3C VLCC rates surging 47% to $82,500 pe rday and war-risk insurance premiums reaching up to 2.8% of the vessel's hull value.
According to Quantum Research, this extreme supply disruption could lead to a short-term spike, with Brent Crude potentially reaching up to the $90/barrel mark. The firm, however, warned that Iran still holds an estimated 3,700 unfired long and medium-range missiles.
READ MORE: Oil Prices Today: Brent Soars To $80 As US-Iran Conflict Spur Supply Worries From Gulf
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