War profiteering and the future of oil

This is not financial advice. Although I have a general interest in economics, I don't claim to be particularly good at personal finance. In fact, one could say that me not being good at personal finance led to this post. It is not meant as advice, but as a journal of my thoughts on the matter.

For nearly 3 decades before my retirement I worked for an oil company. Not on the actual oil exploration and production side, but in research of the chemical transformation of oil into petrochemicals. Like many other large companies, my employer wanted me to own shares in the company. Part of that is that companies believe that employees that hold shares are more interested in the share price and well-being of the company; another part is tax reasons, where paying an employee in shares is taxed less than paying him cash under specific circumstances. And so I received some shares for free, and participated in offers where I would get company shares at a 20% discount. Basically free money, so it would have been stupid to refuse that. But not being good at personal finance, I just let the shares accumulate, with the dividends being reinvested. The miracle of compound interest over decades led to the majority of my retirement savings being in that one stock. On the one side, having much of your savings in a single stock is a bad idea. On the other side, old school bankers in the previous century considered oil shares the best investment for widows and orphans, them being relatively safe and paying good dividends.

And then some idiot decided to bomb Iran. That is generally bad for the global economy and share prices, with the exception of oil shares. A large part of the share price of an oil company depends on the proven reserves multiplied by the price of oil. Skyrocketing oil prices mean significant rises in oil share prices. And so I am war profiteering, obviously without having wanted to do that.

I think it is time to sell a large chunk of my oil shares while they are high. Not that I see anything better to invest in: There is considerable financial risk in shares these days, for various reasons from rising energy prices, to a potential AI bubble, to a potential private credit debt crisis. Price to earnings ratios are at record highs, the stock markets had a long bull run, and a correction is overdue. But selling my oil shares would help me diversify my portfolio. And while the transition from a fossil fuel economy to a renewable energy economy is slow, the long term future of oil is declining. I'm not saying that this is the last chance to get out with a nice profit, but it is a chance, and we don't know how many future opportunities like that there will be.