Navigating Geopolitical Risks in Energy Markets: Opportunities in Oil, Copper, and Gold Amid Volatility

The Israel-Iran conflict and shifting global energy policies have created a volatile landscape for investors, but they also present clear opportunities in oil futures, strategic metals, and gold. With tensions around the Strait of Hormuz threatening global oil supply and central banks diversifying reserves into gold, the stage is set for selective investments that capitalize on geopolitical realignments. Meanwhile, North American resource independence initiatives—such as the Resolution Copper project—are emerging as critical pillars of energy security. Here's how to position your portfolio for this new reality.

Oil Futures: Riding Volatility, Not Fear

The Israel-Iran conflict has sent shockwaves through oil markets, with Brent crude prices spiking to $75.41 and WTI reaching $73.74 in late June 2025. While the Strait of Hormuz remains open, the risk of disruptions—whether through blockades or strikes on infrastructure—remains acute. Analysts at RBC warn that cascading attacks on energy facilities could push prices toward $100 per barrel.

Investors should consider short-term oil futures contracts to profit from volatility, particularly if tensions escalate. However, a strategic long-term play requires caution: while geopolitical risks will keep prices elevated, overexposure to oil alone carries significant downside if the conflict de-escalates abruptly.

Copper Equities: Betting on North American Resource Independence

The Resolution Copper project in Arizona, a joint venture between Rio Tinto (RIO) and BHP (BHP), offers a compelling opportunity to profit from the U.S. push for energy and mineral independence. With the mine expected to supply 25% of U.S. copper demand, it aligns with President Trump's agenda to reduce reliance on Chinese and other foreign imports.

The project's success hinges on a favorable Supreme Court ruling on land rights by late 2025. If approved, the mine could unlock a $6 billion asset, boosting earnings if copper prices stay above $4.50/lb—a threshold supported by rising demand from EVs and renewable infrastructure. Investors should consider overweighting in these stocks, but remain mindful of legal and environmental risks delaying permits.

Gold: The Ultimate Geopolitical Hedge

Central banks, particularly those in the Global South, are amassing gold at unprecedented rates. The World Gold Council reports that 95% of surveyed banks expect global reserves to grow further, with 43% planning to expand their holdings. This de-dollarization trend—driven by distrust in U.S. fiscal stability and sanctions risks—has propelled gold prices to near-record highs.

Gold's role as a crisis-tested store of value is reinforced by its 19% share of global reserves, surpassing the euro. With J.P. Morgan forecasting prices to hit $4,000/oz by mid-2026, physical gold or ETFs like GLD offer a robust hedge against both inflation and systemic instability.

Avoiding the Pitfalls: European Gas and Russian Ties

European gas markets are a minefield. Post-EU sanctions on Russian energy, coupled with dwindling storage levels, have left utilities like Enel (ENEL) and Uniper (UNIP) exposed. Gas futures prices have surged, but the region's overreliance on Russian pipelines and lack of LNG infrastructure will keep volatility elevated.

Investors should avoid European utility stocks and gas derivatives, which face structural risks from supply shortages and regulatory shifts. Similarly, exposure to Russian energy assets—such as Gazprom—remains fraught with geopolitical and liquidity risks.

Strategic Positioning for 2025 and Beyond

1. Oil Futures: Use short-term contracts to profit from near-term volatility but avoid overexposure.
2. Copper Equities: Overweight RIO and BHP if the Resolution Copper project clears legal hurdles.
3. Gold: Allocate 5–10% of portfolios to GLD or physical gold for diversification.
4. Avoid: European gas and Russian energy ties due to regulatory and supply risks.

Conclusion

Geopolitical risks are reshaping energy markets, but they also create asymmetric opportunities. Investors who focus on North American resource independence, gold's safe-haven appeal, and disciplined oil exposure will be best positioned to navigate this era of uncertainty. As central banks and nations double down on strategic assets, the mantra remains: hedge the risks, but bet on resilience.