Market Call: Eric Nuttall's Outlook on Energy Stocks (March 26, 2026)

Why It Matters

The imminent supply crunch will likely push oil prices to historic highs, rewarding low‑cost producers and reshaping energy‑sector portfolios for the next several years.

Key Takeaways

• Strait of Hormuz closure cuts 11 million barrels daily, worsening crisis.
• Expected 920 million barrel loss in 2026 exceeds COVID demand shock.
• Oil price may need to hit $175/barrel to curb demand.
• Canadian producers like Cenovus and Tamarack favored amid supply insecurity.
• LNG supply disruptions raise natural‑gas risk, limiting diversification.

Summary

Eric Nuttall, partner at Nine Point Partners, warned that the prolonged closure of the Strait of Hormuz is creating the worst energy crisis of his career, with Middle‑Eastern output down roughly 11 million barrels per day and global inventories already under pressure.

He quantified a cumulative loss of about 920 million barrels of Middle‑Eastern production through 2026—more than the demand shock of COVID‑19—and said current Brent and WTI prices have not yet reflected that gap. With the Strategic Petroleum Reserve slated to release 4 million barrels per day and on‑shore and off‑shore storage dwindling, Nuttall predicts oil may need to trade near $175 a barrel, roughly 5.5 % of global GDP, before demand curtails itself.

Nuttall highlighted specific equities, noting Nine Point’s 4 % stake in Spartan Delta, which has risen 85 % and is projected to grow output 50 % over four years, and his fund’s near‑max weight in Canadian blue‑chip Cenovus and mid‑cap Tamarack Valley as the most attractive long‑term plays. He also warned that recent LNG supply setbacks, such as Qatar’s 20 % outage, leave natural‑gas fundamentals fragile and unlikely to offset oil price spikes.

For investors, the message is clear: overweight oil, especially secure Canadian producers, and stay cautious on natural‑gas and LNG exposure until inventories are exhausted and prices fully price in the supply shortfall. The coming weeks could see a rapid price correction that reshapes sector allocations and rewards firms with low‑cost, politically stable production.

Original Description

Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, shares his outlook on Energy Stocks.

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