The war in Iran has had a ripple effect outside of just energy. Shares of Nutrien Ltd. (NTR), for instance, are at a three-year high on higher fertilizer prices because of the war. Roughly one third of global fertilizers pass through the Strait of Hormuz, says Amber Kanwar, host of the In the Money with Amber Kanwar podcast.
The Middle East is also a major exporter of urea and ammonia - two key fertilizers. Jefferies upgraded Nutrien to buy on the rise in fertilizer prices, noting that it is happening just as spring planting season is beginning. The price target implies there is still 21.5% upside.
Coal prices are also elevated because of LNG disruptions. When LNG prices rise and supply is constrained, countries switch to coal, and that increases demand. The Range Global Coal Index ETF (COAL) ETF is up 7% since conflict broke out.
On the downside, the Canadian rails have been hit on concerns that the war will lower consumer demand as input costs increase and weigh on margins. Travel stocks like airlines and cruise lines are also sharply lower on a diminished travel outlook and higher fuel costs. These are sectors to watch if the clouds start to part.
