By Reshma Kapadia

The U.S. and Iran may again be trying to reach a resolution that would reopen the Strait of Hormuz. The timing and details of any resolution are unknown, but investors may want to have a list of potential beneficiaries at the ready.

The Strait of Hormuz has been closed for about three months, well beyond the timeline most investors had set as a red line for when a blockade in flows of energy, fertilizer and helium would result in shortages and price spikes that harm global economic growth.

After a peace resolution is reached, and ships can get through Hormuz, it will be months before the flow of energy, gas and other commodities gets back toward more normal levels, analysts say, with prices likely to stay elevated for months.

But markets tend to look ahead and analysts see ETFs and stocks that will bounce with a resolution.

For now, Sean Taylor, chief investment officer for Matthews Asia, described the southeast Asian region as "miserable" in terms of opportunities, in part because of the price of oil. Many countries are net importers and struggling to mitigate the impact of higher prices and shortages of critical inputs with subsidies and stimulus that is straining, in some instances, shaky finances.

In the Philippines, the oil price surge has hit an economy already struggling with twin deficits: fiscal and current accounts. Net imports of oil make up about 7% of Thailand's GDP, one of the highest exposures, according to BCA Research emerging markets strategist Arthur Budaghyan.

The closure of Hormuz upended about half of Thailand's oil supply and the government has rushed to offer subsidies and cost-of-living relief as farmers and consumers reel from the higher prices. It's also caused the currency to depreciate.

The Global X FTSE Southeast Asian ETF is a way to get broader exposure to these smaller markets, for when they bounce back.

About a fifth of the ETF is invested in Thailand, while 3.5% is in the Philippines. Another 16% is in Malaysia and 10% is in Indonesia, both of which could also get a lift from a resolution in Iran.

India is one of the largest economies that has been hit hard by the closure of Hormuz, which accounted for about half of the country's oil supply. The government has started austerity programs to reduce energy use and rushed out subsidies to cushion the impact, straining its fiscal health.

An Iran resolution could get India out of the investor doghouse. Indian stocks are in the midst of their worst year in three decades in terms of performance versus Asian peers. Indian businesses are facing cash-strapped consumers, reeling from shortages in cooking gases, and seeing sharp spikes in cost of living and lower remittances.

A pullback in oil prices could offer Indian stocks a much-needed catalyst, with the iShares MSCI India ETF a quick way to get broad exposure.

China has navigated the situation better even though it is a net oil importer too. The country has diversified its energy sources, including into renewables, and had built up its strategic petroleum reserve to a greater extent than others, giving it some extra cushion.

But a resolution would help China, not just on energy costs but also by reducing the risk of a global economic slowdown on the back of a protracted conflict that could dent the strong export growth that has kept China's economy from teetering.

Two quick ways to tap Chinese stocks: the iShares MSCI China exchange-traded fund $(MCHI)$ or the more domestically-oriented iShares MSCI China A-shares ETF $(CNYA)$.

Another beneficiary could be European equities, as lower energy prices will help the EU economies and reduce the pressure on policymakers to raise interest rates to combat inflation, says DataTrek co-founder Nicholas Colas. The iShares Core MSCI Europe ETF or the Vanguard FTSE Europe ETF are two ways to get broad exposure to the region.

Companies catering to U.S. consumers could also benefit. Households are paying roughly $450 more for gas, hurting lower-income consumers more disproportionately, and any resolution that reduces some of those costs could help. One option: Consumer Discretionary Select Sector SPDR Fund, which includes discount retailers like TJX and Ross Stores.

Write to Reshma Kapadia at reshma.kapadia@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 30, 2026 03:00 ET (07:00 GMT)

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