Market Commentary: Muted Market Reaction to Israel-Iran War
- Yves Siegel
- Jun 24
- 8 min read
MARKETS DISCOUNT RISK TO GLOBAL OIL SUPPLIES
On Friday (June 13th) following Israeli’s airstrike attack on Iran, oil prices (WTI) climbed to ~$73 per barrel (up ~$5 per barrel from the previous day close) to its highest price since February 2025. Although the United States did not directly take part in the attack, President Trump was informed of Israel’s intent. In an interview with Fox News Channel’s Bret Baier on Sunday afternoon, Israel’s Prime Minister, Benjamin Netanyahu explained that Israel has two strategic objectives:
Eliminate Iran’s ability to make a nuclear bomb
Prevent the buildup of Iran’s ballistic missile arsenal
The latter in a barrage has been shown that it is capable of penetrating Israel’s air defense.
Year-to-Date S&P Return vs. WTI Crude Oil Prices as of 6/16/25

Source: S&P Global and EIA
The situation remains fluid, and the reaction in the oil and stock markets has been relatively muted—WHY?
1. Iran has reached out through back channels to re-start negotiations with the U.S. and Israel to end the conflict. However, a peaceful resolution rests on Iran’s willingness to dismantle its uranium enrichment capabilities in a way that is verifiable—this is key to a successful negotiation.
2. Israel does not want to disrupt international oil markets, likely due to President Trump’s preference for low oil prices. As reported by Bloomberg, Israel temporarily knocked out a natural gas processing facility linked to the giant South Pars natural gas field and targeted fuel storage tanks. We believe these strikes are intended to harm Iran’s economy, as it relies heavily on natural gas for domestic power, not exports.
3. Iran has not targeted U.S. military bases nor energy facilities in the region. The Financial Times suggests that Iran does not want to draw the U.S. into the war and disrupt its improved relations with rival Gulf states, such as Saudi Arabia and the United Arab Emirates.
4. Iran appears unlikely to disrupt shipping in the Strait of Hormuz, for now. This strait is crucial, with 20% of global oil and 20% of global liquefied natural gas (LNG) passing through it daily. Saudi Arabia is the largest shipper, transporting about 5.5 million barrels per day.
5. The world is well supplied with oil. According to the International Energy Association (IEA) in its June 2025 Oil Market Report, “In the absence of a major disruption, oil markets in 2025 look well supplied.” Additionally, OPEC has about 5 MMBPD of spare capacity that could support a shortfall of supply, albeit its willingness to do so is questionable. Most of the spare capacity (3 MMBPD) rests with Saudi Arabia.
OUR TAKE: We believe the Israel-Iran conflict will be short-lived due to Israel's military strength and U.S. support. In the short term, we expect continued market volatility as the situation evolves. Geopolitical events can be disruptive on financial markets, but effects are often transitory. After an airstrike attack, the market quickly rebounded but retreated when President Trump downplayed prospects for an Israel-Iran truce. He communicated a desire for a permanent resolution to the nuclear threat vs. a temporary ceasefire. As of this writing, WTI crude oil price is currently holding firm at ~$75 per Bbl.
The impact of higher crude oil prices is a positive for energy stocks, all else being equal. Specifically, there is a 0.53 correlation between the AMNA Index and crude oil prices year-to-date, according to Wells Fargo’s Midstream Energy equity research team. Crude oil prices at these levels could stabilize the U.S. oil rig count, which has declined since the beginning of April from lower oil prices and higher OPEC supply. The anticipated slight decline in 2026 U.S. crude oil production could prove conservative, in our view. The EIA forecast in its June 2025 Short-term Energy Outlook report that crude oil production will average a bit more than 13.4 million barrels per day in 2025 and a bit less than 13.4 million in 2026.
The Federal Reserve’s actions this week will also impact overall market performance. Despite pressure from the Trump administration, the market is expecting the Fed will likely hold interest rates steady, a cautious move given inflation risks from new tariffs and higher crude oil prices.
STAY THE COURSE WITH NATURAL GAS
As we have written in past market commentaries, we are very bullish on the outlook for natural gas consumption growth (domestic consumption and exports) and those companies that benefit from this secular tailwind. The Williams Companies, Inc. (NYSE-WMB) is one such company. Below are highlights from our fireside chat with the company’s Chief Financial Officer, John Porter. A replay of the video can be found on our website: www.siegelassetmgt.com.
SAM Partners is staying the course with midstream companies that have exposure to favorable natural gas fundamentals and growth prospects. Notably, c-corps under this category have outperformed the S&P 500 (up 3.2% year-to-date as of 6/16/25) and companies that are more weighted towards crude oil and/or natural gas liquids (NGLS). Performance of pure-play natural gas stocks (e.g., WMB is up 9.3% YTD) have also benefitted from the scarcity value of gas infrastructure.
Year-to-Date Price Performance as of 6/16/25

Source: Bloomberg
KEY TAKEAWAYS FROM WILLIAMS FIRESIDE CHAT
We recently hosted a fireside chat with John Porter (SVP and Chief Financial Officer) of The Williams Companies, Inc. (NYSE-WMB). WMB stands out as the only large cap pure-play natural gas company investment. It owns and operates the premier U.S. natural gas interstate pipeline Transco Pipeline and WMB’s assets in total, handle approximately one-third of the nation’s natural gas.
HERE ARE SOME HIGHLIGHTS:
1. Well positioned to lead in “Golden Age” of natural gas. Over the last five years, natural gas has evolved from a domestic commodity to a global one, thanks to LNG exports. With its strong financial position, WMB has the balance sheet capacity to participate in a large investment opportunity set to further build its natural gas-focused assets.
Williams’ Asset Map in U.S. Gulf Coast + U.S. L-48 Large Scale Approved and Potential Liquefaction Facilities per EIA

Source: The Williams Companies, Inc.
1. Long-term outlook for natural gas remains bright. Demand for natural gas is expected to continue rising, driven by LNG exports and the growing need for electricity due to electrification and the expansion of AI/data centers.
Electrification of heating and transport, data centers, and AI-driven future will create unprecedented growth in power demand

Source: The Williams Companies, Inc.
3) Track record of delivering growth despite past challenges. WMB highlighted it’s projected attractive 5-year (2020-25E) adjusted EBITDA growth rate of 9% during a period impacted by the pandemic and volatility in commodity prices.
Quarterly Growth: Williams Base Business Adjusted EBITDA, Contracted Transmission
Capacity and Gathering Volume vs. Crude Oil and Natural Gas Commodity Prices

Source: The Williams Companies, Inc.
4) Clear line of sight for continued growth – likely to revisit target of 5-7%. The next phase of Williams' growth is supported by a strong backlog of projects. Capital spending will remain high to achieve attractive returns on large-scale projects like the $1.6 billion Socrates power generation project. The company aims to maintain a balanced debt-to-EBITDA ratio of 3.5 to 4.0x, with room for more spending if returns are solid.
5) WMB has novel project to supply power to data centers. During Q1’25 WMB commercialized its first power generation project “that will deliver speed-to-market solutions for growing AI demand in Ohio” utilizing natural gas turbines. The $1.6 billion Socrates project entails building two gas-powered generation sites with generating capacity of 200 megawatts each in New Albany, Ohio with a target in service date in Q3’26. Importantly, the project is backed by 10-year purchase power agreements with attractive project returns. In a recent filing it was disclosed that Meta is the counterparty.
Mr. Porter noted that the company is close to commercializing another two projects comparable to Socrates and is in discussions with other large hyper-scalers.
6) Proposed Northeast gas pipelines back in the realm of possibility. At the end of May, WMB submitted to the Federal Energy Regulatory Commission (FERC) for reinstatement of the certificate of public convenience and necessity for the Northeast Supply Enhancement (NESE) project. The ~$1B project could be placed into service as early as 2027, adding approximately 400,000 dekatherms per day (Dth/d) of pipeline capacity to the Transco system. The company is also working on reviving the Constitution Pipeline, which could add 650,000 dekatherms per day of capacity, though this project faces more commercial challenges.
7) Implications of the "Big Beautiful Bill." Proposed legislation aims to streamline energy infrastructure permits, making it easier to build natural gas pipelines. It would also limit challenges to projects to those directly impacted by construction, potentially speeding up new developments. If passed, the bill could allow for 100% bonus depreciation of non-regulated assets, allowing Williams to defer taxes and further benefit from increased gas production in Appalachia.
MAY REVIEW: BEST MONTHLY GAIN FOR OVERALL MARKET SINCE 2023
The rundown:
In May, SAM’s Infrastructure Income Portfolio produced a return (net of fees) of 2.8% compared to 6.3% for the S&P 500 and 3.4% for its customized benchmark. Year-to-date, SAM’s Infrastructure Income Portfolio produced a return (net of fees) of 1.7% compared to 1.1% for the S&P 500 and 5.8% for its customized benchmark.
In May, SAM’s Energy Transition Portfolio generated a return (net of fees) of 8.6% versus 5.0% for its customized benchmark. Year-to-date, SAM’s Energy Transition Portfolio generated a return (net of fees) of -2.2% versus 8.1% for its customized benchmark.
SAM’s portfolios are more heavily weighted in Midstream, which has underperformed relative to the clean energy sector and utilities in May and year-to-date.
Midstream underperformed the overall market and was up in May with a total return of 2.1%, as measured by the AMNAX.
In May, utilities underperformed and the clean energy sector outperformed the overall market, generating a total return of 2.7%and 7.8%, as measured by the Philadelphia Stock Exchange Utility Index (XUTY) and the S&P Global Clean Energy Index (SPGTCLTR), respectively.
With the exception of healthcare, sector performance in the S&P 500 was all positive with information technology as the best performer and healthcare as the worst. Energy delivered a 6.3% monthly total return. April month-end WTI crude oil and Henry Hub natural gas prices were $61.46 Bbl and $2.86 per MMBtu, up ~3% and down ~8%, respectively from last month.
RESULTS: SINCE INCEPTION & ONE YEAR
SAM’s Infrastructure Income Portfolio produced a return (net of fees) of 134.3% and 25.3% for the periods since 11/10/20 inception and 1-year, respectively. This compares to a total return of 125.4% and 18.8%, respectively, for its customized benchmark and 78.6% and 13.5%, respectively, for the S&P 500 as of 5/30/25.
SAM’s Energy Transition Portfolio generated a return (net of fees) of 20.9% and 8.9% for the periods since 4/29/21 inception and 1-year, respectively. This compares to a total return of 25.8% and 6.2%, respectively, for its customized benchmark and 49.3% and 13.5%, respectively, for the S&P 500 as of 5/30/25.
2025 Year-to-Date Total Return as of 5/30/25

Source: Bloomberg, NASDAQ and S&P Global

Sam Partners’ Infrastructure Income and Energy Transition Strategies seek to provide sustainable income and growth with capital preservation. This is accomplished by investing in a concentrated portfolio of high-quality midstream energy companies, utilities and clean energy companies that are well positioned to participate in the energy transition to a net zero carbon future. A diversified approach to investments across these sectors should optimize risk-adjusted returns, in our view. Our Infrastructure Income Strategy offers investors a current yield of ~4.0% and growth potential of ~5-7%; while the Energy Transition Strategy that is more heavily weighted with clean energy stocks and aligns with favorable ESG ratings, offers investors a current yield of ~3.5%. In a world searching for yield, we believe these Strategies offer a compelling value proposition.
IMPORTANT DISCLOSURES
Siegel Asset Management Partners is a registered investment adviser located in Plainview, New York. The views expressed are those of Siegel Asset Management Partners and are not intended as investment advice or recommendation. This material is presented solely for informational purposes, and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness, or reliability. All information is current as of the date of this material and is subject to change without notice. Third-party economic, market or security estimates or forecasts discussed herein may or may not be realized and no opinion or representation is being given regarding such estimates or forecasts. Certain products and services may not be available in all jurisdictions or to all client types. Unless otherwise indicated, Siegel Asset Management Partners' returns reflect reinvestment of dividends and distributions. Indexes are unmanaged and are not available for direct investment. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.
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