Everyone’s watching oil prices rocket past $100 a barrel. And sure, the Iran conflict has sent crude into a tailspin — Brent’s all over the place, and analysts are tossing around $200 targets like candy.
But here’s the thing: oil isn’t the only commodity caught in this mess. When geopolitical chaos hits the Strait of Hormuz, the ripple effects spread far and wide. One surprising beneficiary? Aluminum.
Aluminum production is an energy hog. It takes massive amounts of electricity to smelt, which means when energy prices spike, aluminum costs spike too. The Iran war is a double-whammy: it’s knocked out about 10% of global aluminum supply (most of it from the Middle East), and it’s driven electricity costs through the roof. Iran just hit two major Gulf producers with strikes that caused significant damage.
So who wins? The aluminum producers with locked-in, low-cost energy. Specifically, companies powered by hydro, nuclear, or other renewables that aren’t riding the fossil fuel rollercoaster.
Enter Alcoa Corp. The company is the largest U.S. aluminum producer, and roughly 87% of its smelting operations run on renewable energy. That’s not greenwashing, it’s a structural cost advantage. While competitors scramble to cover rising electricity bills, Alcoa’s costs stay relatively stable. And when aluminum prices climb (which they are), Alcoa pockets the spread.
The stock’s already bouncing back from its tariff-induced selloff earlier this year. It trades at less than 12x forward earnings, well below its historical 20x multiple, even as Wall Street quietly raises earnings estimates for 2026. Next earnings report drops April 16.
Bottom line: Aluminum is having its moment. And Alcoa is one of the few positioned to ring the register without getting crushed by its own energy bill.
