Barclays analyst Theresa Chen said in a note on Monday that talk of a U.S. crude or refined product export ban is likely to grow louder as the midterm elections near, despite the Trump administration's current opposition to such an action.
The analyst's note was issued amid a marked deterioration in U.S.-Iran relations. According to the note, Iran paused negotiations after Israel expanded operations in Lebanon, and President Trump is reported to have rejected a proposed memorandum of understanding that would have addressed both the reopening of the Strait of Hormuz and nuclear discussions. Over the weekend the two countries exchanged air strikes, a development that Barclays said wiped out much of the optimism that had surrounded prospects for an extended ceasefire the previous week.
Barclays warned that even if a diplomatic outcome is reached and the Strait of Hormuz reopens, energy prices are likely to remain elevated. The firm pointed to reduced refining capacity in the Middle East and dwindling global inventories as markets head into the peak gasoline demand season, factors it expects to keep price pressure in place.
Describing the idea of export curbs, Barclays said such measures would be "a cure worse than $100 oil." The note argued that implementing an export ban would inflict harm broadly across the infrastructure value chain, particularly hitting refiners and midstream companies that rely on the ability to move crude and refined products freely.
Despite that wide-ranging negative assessment, Barclays identified a specific company it believes could fare relatively well under the scenario. The firm said it "views SUN as the likely best way to play the scenario," citing Sunoco's capacity to take advantage of commodity price volatility and, importantly, its ownership of a small Canadian refinery. Barclays noted that the Canadian asset would sit outside the jurisdiction of any U.S. export restrictions, positioning Sunoco to access strong refining margins that domestic peers might be unable to capture.
The note also observed that the Trump administration has so far been "unwavering in its stance against any kind of export ban," a stance Barclays said makes an actual ban unlikely. The firm cautioned, however, that strong rhetoric around the subject could still move markets even if formal restrictions do not materialize.
Market context cited in the note included moves in relevant instruments, with Crude Oil WTI futures showing CL -0.98% and Sunoco trading at SUN +1.77% at the time of the commentary.
As Barclays framed it, the combination of geopolitical tensions, constrained regional refining capacity, and thinning inventories into a peak demand season leaves energy markets vulnerable to both physical supply disruptions and politically driven policy responses that could amplify volatility.