What is the Strait of Hormuz?

The Strait of Hormuz is a narrow waterway, just 21 miles wide at its narrowest point, that carries roughly 20% of global oil supplies daily. Iran's threats to close this critical chokepoint have triggered major market volatility, making it the world's most strategically vital shipping lane.

What does event-driven investing mean?

Event-driven investing involves capitalising on market dislocations caused by specific geopolitical developments or crises. Unlike traditional sector rotation based on economic cycles, this strategy depends on temporary market inefficiencies created when traders overreact to political events or security threats.

Why do defence stocks rise during geopolitical tensions?

Defence contractors benefit because governments predictably increase military spending when tensions escalate. Companies like Lockheed Martin, Northrop Grumman, and General Dynamics see expanded order books as nations modernise arsenals and boost military readiness in response to genuine security threats.

How do energy companies benefit from Persian Gulf tensions?

Energy producers operating outside conflict zones gain from supply security premiums and avoid operational risks. American shale producers benefit from higher oil prices driven by supply disruption fears whilst maintaining secure operations, making them premium supply sources worth paying extra to secure.

What are the risks of geopolitical investing?

Geopolitical investing involves higher volatility and shorter time horizons than traditional strategies. Political developments can shift rapidly, changing investment fundamentals quickly. Successful crisis investors typically use smaller position sizes and more active monitoring than conventional buy-and-hold approaches.

Which defence companies benefit from Strait of Hormuz tensions?

The top defence contractors positioned for growth include Lockheed Martin (F-35 fighters, missile systems), Northrop Grumman (unmanned systems, cyber warfare), and General Dynamics (combat vehicles, naval systems). These established contractors have proven capabilities governments rely on during security crises.

Why did the Dow Jones drop 1,200 points?

The dramatic market drop occurred due to fears over Iran's threats to shut down the Strait of Hormuz. Traders reacted to potential oil supply disruptions from this critical waterway that carries 20% of global oil supplies, creating widespread market panic.

How long do geopolitical investment opportunities last?

Defence spending increases often persist long after initial crises subside, as nations modernise equipment and expand capabilities. Energy security premiums can also provide sustained demand through strategic stockpiling and supply diversification efforts, suggesting longer-term sustainability than typical event-driven plays.

What makes this different from normal market volatility?

This crisis creates asymmetric opportunities where specific sectors benefit disproportionately from tensions. Defence contractors face inelastic government demand, whilst non-Persian Gulf energy producers gain pricing power and strategic importance - fundamentally different from cyclical market movements.

Can I invest in geopolitical themes with small amounts?

Yes, Nemo's ADGM-regulated platform offers commission-free investing in the Geopolitical Investing basket with fractional shares starting from just £1. The platform provides AI-driven research and comprehensive analysis tools to make crisis-driven investing accessible to all investors.

Iran's Strait of Hormuz Gambit: Defence Stocks and Energy Plays

• 4 min read

• Published on 4 March 2026

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Iran's Strait of Hormuz Gambit: Defence Stocks and Energy Plays

• 4 min read

• Published on 4 March 2026

Summary

Geopolitical tensions create unique event-driven investment opportunities in specific sectors.
Defence stocks could see growth from increased government military spending.
Energy producers outside the Persian Gulf may benefit from supply security premiums.
Market uncertainty from global crises can offer strategic portfolio advantages.

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View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

Navigating the Geopolitical Storm in Your Portfolio

Well, here we go again. Iran makes a few pointed threats about the Strait of Hormuz, the Dow Jones has a wobble and sheds over a thousand points, and suddenly everyone is in a panic about the price of petrol. It’s a familiar dance, isn’t it? To me, however, this isn't just another crisis to wring our hands over. For a pragmatic investor, it’s a rather predictable, if somewhat grim, pattern that presents a clear opportunity. When the world’s most important waterway becomes the stage for a geopolitical spat, you can be certain that capital will flow in very specific directions.

View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

Time to Polish the Brass

When military tensions begin to simmer, two things tend to happen. First, news channels dust off their dramatic maps with flashing red arrows. Second, governments miraculously find money in their budgets for more jets, missiles, and impressively large ships. It's hardly a surprise then that the order books for defence stalwarts like Lockheed Martin or Northrop Grumman could start to look a little healthier. This isn't about cheering for conflict, let's be clear. It is simply a cool-headed observation that political instability often translates directly into bigger defence contracts as nations look to bolster their security.

View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

Paying a Premium for Peace and Quiet

Now, let's talk about the energy market. The moment Iran even hints at disrupting passage through Hormuz, the value of every barrel of oil sitting somewhere safe, say in a Texan oilfield, ticks upwards. The logic is straightforward. Why would you want your supply chain dependent on a route that could be closed at a moment's notice when more reliable options exist? This creates a clear premium for energy producers located far from the drama, a theme explored in our Geopolitical Investing: What's Next for Markets basket. Investors may begin to favour operational stability over sheer volume, which seems like a sensible shift in priorities.

View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

View the full Basket:Geopolitical Investing: What's Next for Markets

15 Handpicked stocks

Hey! We are Nemo.

Download the App

Scan the QR code to download the Nemo app and start investing on Nemo today

Invest Today on Nemo

Iran's Strait of Hormuz Gambit: Defence Stocks and Energy Plays

Iran's Strait of Hormuz Gambit: Defence Stocks and Energy Plays

Summary

Navigating the Geopolitical Storm in Your Portfolio

Time to Polish the Brass

Paying a Premium for Peace and Quiet

Summary

Navigating the Geopolitical Storm in Your Portfolio

Time to Polish the Brass

Paying a Premium for Peace and Quiet

A Calculated Response to Chaos

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