Sage Capital Chief Investment Officer Sean Fenton outlines opportunities in refiners, electric vehicles (EVs) and airlines amid geopolitical tension.

In a recent interview with Nadine Blayney of Ausbiz, Sage Capital’s Sean Fenton shared his views on navigating markets as energy shocks, geopolitics and central bank policy collide. His message: caution is warranted, but selective opportunities may exist for those willing to look beyond the headlines.

The bigger picture: energy security and dollar dynamics

Fenton sees Middle East tensions, particularly Iran's asserted control of the Strait of Hormuz, as a structural risk that extends well beyond oil prices. Amid reports of tolls being charged in Yuan, he sees this shift as a slow but meaningful challenge to the US dollar's petrodollar dominance.

> This backdrop supports the role of gold and energy exposure as portfolio hedges.

Domestic refiners: Ampol and Viva Energy

Despite longer-term headwinds from EVs, Fenton highlights Ampol (ASX:ALD) and Viva Energy (ASX:VEA) as key beneficiaries of current conditions:

• Higher refining margins in the short term
• Strengthened government support for domestic fuel security
• Industry consolidation dynamics supporting medium-term value

"The changing attitude of the government, the increasing support, is helping to underwrite some of the value in these companies."

The EV transition: slower than you think

While EV demand is surging and government policy is accelerating the shift, Fenton notes that vehicle fleet turns over gradually. The transition will take considerable time, creating opportunities on both sides.

Eagers Automotive (ASX:APE) stands out as a domestic play benefiting from strong BYD sales, Australia's top-selling EV brand. Beyond auto dealers, Fenton points to commodity plays leveraged to electrification such as copper, lithium, and rare earths, as longer-term beneficiaries.

Airlines: patience required

Fenton remains constructive on Qantas (ASX:QAN) and Virgin (ASX:VGN), citing the supportive domestic duopoly structure and pricing power. However, he cautions that near-term earnings pressure is likely given elevated jet fuel costs.

"People's demand for travel is very resilient to recessions... but they've probably got an earnings hit coming up in the short term."

Energy majors: a useful hedge

Fenton points to selective exposure to Woodside Energy (ASX:WDS) and Santos (ASX:STO) as a potential hedge against further disruption, while noting that equity prices largely reflect forward curves rather than spot prices.

The RBA challenge

Fenton warns the RBA faces a difficult path ahead, balancing inflation control against a leveraged household sector sensitive to interest rate changes. The risk of overtightening into a weakening economy remains elevated.

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