Iran Applies ‘High Oil Price’ Tactics Learned from Vietnam War... Stocks That Still Profit [Weekend Money]

Oil Prices Expected to Remain High Ahead of Midterm Elections
Central Banks Under Pressure to Raise Interest Rates
Focus on Beneficiaries of Rate Hikes and Earnings Leaders

The war between the United States and Iran, which was initially expected to conclude in the short term, is becoming protracted. According to analysis from the securities industry, Iran is likely to actively leverage the "high oil price environment" card as an asymmetric tactic, taking a cue from the Vietnam War era.

According to DB Securities, analyst Hyunki Kang stated, "The war between the United States and Iran has now entered its seventh month," adding, "Attention should be paid to the fact that Iran’s current approach is similar to that of North Vietnam during the Vietnam War."

Iran’s Asymmetric Tactics Are Resembling North Vietnam... A Shift Toward a War of Attrition

Kang highlighted the high probability that Tehran is referencing North Vietnam’s strategy when making policy decisions. At that time, North Vietnam maintained a long-term approach aimed at reducing American support for the war over several years.

Kang explained, "North Vietnam pursued both war and negotiations simultaneously, focusing on instilling the perception among Americans that the conflict would not end quickly," and assessed, "In the current war, although negotiations took place following clashes, tensions have once again escalated."

He further pointed out, "Despite the overwhelming military might of the United States, Iran’s use of asymmetric tactics is lowering expectations that the war will be wrapped up quickly."

Insurance and Banks to Benefit... Growth Stocks Narrowed Down to Cosmetics and Semiconductors

The protracted nature of the war could keep international oil prices at elevated levels. If this happens, central banks in various countries are likely to strengthen their stance on raising interest rates, placing pressure on the broader stock market.

Kang noted, "(Iran's actions) could cause oil prices to fluctuate significantly ahead of major U.S. elections. From an investment strategy perspective, it is important to consider the possibility that oil prices could remain high for quite some time," he explained.

Which sectors are likely to withstand the ongoing pressures of high oil prices and interest rate hikes? Kang pointed out, "Since central banks have been raising rates in response to rising oil prices, there could be heightened investor preference for sectors such as insurance and banking."

He also commented, "Among growth stocks, there may be a stronger tendency to invest selectively in companies with clear prospects for earnings improvement. This could explain why the cosmetics and semiconductor sectors continue to come up in investment discussions."

This content was produced with the assistance of AI translation services.