Oil has climbed back towards $110 a barrel. OPEC+ chose to leave its output policy unchanged this month, and the higher price has revived talk of the Fed raising rates in December. For energy shares it has been a very good year. For the companies that buy fuel, less so.
The move in oil
A high oil price works through the economy in two directions at once. Producers earn more on every barrel they already pump, and much of that falls straight to profit. Everyone who burns fuel, from airlines and cruise lines to farmers and delivery firms, pays more. Central banks watch it closely because it pushes up inflation, which is why the same headline can lift energy shares and weigh on growth shares on the same day.
Energy against the market
| Portfolio | 1 month | 3 months | 1 year | S&P 500, 1 year |
|---|---|---|---|---|
| US & Middle East Energy Index10 companies | +11.4% | +21.4% | +62.3% | +14.4% |
| Saudi Vision 2030 Index10 companies | −10.2% | −11.6% | +15.5% | +14.4% |
| Cruise & Travel Recovery Index12 companies | +10.4% | +2.1% | +6.7% | +14.4% |
| AgTech & Precision Farming Index10 companies | −7.6% | −1.7% | +21.2% | +14.4% |
| Restaurant Growth Chains Index10 companies | +1.0% | −9.4% | −26.6% | +14.4% |
Prices up to 22 October 2026. Returns before each portfolio was made are simulated from real past prices, with no fees or taxes. Past performance is not a guide to the future.
As of 20 October our US and Middle East Energy portfolio had returned about 66% over twelve months against roughly 15% for the S&P 500. The Saudi Vision 2030 portfolio, which is built around the kingdom’s plan to grow beyond oil, had done far less well over three months. Owning a country that sells oil is not the same as owning the companies that produce it.
Who pays for expensive fuel
- Travel: fuel is one of the largest costs for airlines and cruise lines.
- Farming: diesel, fertiliser and transport all rise with oil, which is part of why farm aid is a political issue this autumn.
- Restaurants and retail: higher delivery costs and squeezed customers at the same time.
The risks in chasing it
Energy shares have a long record of rising fastest just before oil turns. Producers are priced on the oil price people expect, not today’s, and a single OPEC+ decision or a slowdown in demand can change that quickly. If you add energy to a portfolio now, look at how the same companies behaved in 2020, when oil briefly collapsed. Every Arithmos backtest covers that year.
Arithmos is a research tool. Nothing here is advice to buy or sell energy shares.
