On 12 March 2026, Brent crude settled above $100 per barrel for the first time since August 2022. The 9.2% single-day surge was triggered by Iran’s new Supreme Leader declaring the Strait of Hormuz would remain closed and by fresh attacks on commercial vessels across the Arabian Gulf. The International Energy Agency responded with its largest-ever coordinated reserve release — 400 million barrels from 32 member nations — and the market shrugged it off.
Two weeks ago, most PE portfolio models and acquisition underwriting assumptions were built on Brent at $65–70. That world is gone, at least for now. The US Energy Information Administration forecasts Brent will remain above $95 through May, before potentially easing below $80 in Q3 — but that forecast is heavily contingent on a resolution that does not yet exist.
This article is not an oil market commentary. It is a practitioner’s guide to the three decisions that PE investors, acquirers and corporate development teams with energy-intensive assets need to be making right now.
1. If You Are Holding Energy-Intensive Portfolio Companies
The immediate question is margin compression, and the speed at which it will show up depends on the contract structures in your portfolio. Companies with index-linked energy procurement or short-term spot exposure are already seeing the hit. Those with 6–12 month hedges have a window — but that window is closing, and every renewal is repricing into a different world.
The sectors with the most direct exposure are well understood: chemicals, packaging, food processing, logistics, manufacturing, building materials. But the second-order effects are catching portfolio companies that don’t think of themselves as energy-intensive. Fuel accounts for 50–60% of the total operating cost of maritime freight. Any business with supply chains routed through Asia or dependent on Gulf-sourced petrochemical feedstocks is facing shipping surcharges, extended lead times and working capital strain.
European natural gas benchmarks are up 75% since the conflict began. For any portfolio company using natural gas as a production input — glass, ceramics, food processing, agriculture, data centres — this is a direct cost event.
What to do now: For every energy-intensive portfolio company, conduct a rapid 90-day margin stress test. Model EBITDA at $100, $120 and $130 Brent, and map the transmission path: direct energy procurement, freight and logistics costs, raw material indices linked to petrochemicals, and contract pass-through mechanisms. Identify which costs are hedged, at what tenor, and when hedges roll off. The businesses most at risk are those with high energy intensity, low pricing power, and long-dated fixed-price customer contracts. If you find that combination in your portfolio, you need a management action plan this month, not next quarter.
2. If You Are Acquiring or Carving Out Energy-Intensive Targets
Every acquisition model built before 28 February needs to be reopened. If your base case used $65–70 Brent, your margin assumptions, working capital projections and terminal value calculations are wrong. The question is whether they are wrong in a way that kills the deal, creates an opportunity, or simply changes the price.
Start with the target’s energy cost pass-through mechanics. This is the single most important variable in determining whether a company’s earnings profile is structurally resilient or temporarily inflated. A chemicals business with contract structures that pass feedstock cost movements to customers within 30–60 days may see revenue volatility but margin stability. A packaging business with annual fixed-price contracts and monthly energy repricing will see margin destruction in real time. In diligence, these are not footnotes. They should be in the first five pages of your commercial assessment.
Carve-outs present an additional layer of complexity. Post-separation, the carved-out entity faces standalone energy costs that may be materially higher than historical financials suggest. In a $100+ Brent environment, the gap between ‘as part of the group’ and ‘standalone’ energy economics can be the difference between an attractive EBITDA multiple and an uninvestable one.
On the opportunity side: acquirers with strong balance sheets are already repositioning. Buyers are beginning to dictate terms, capitalise on distressed or forced sales, and demand contractual protections that would have been dismissed eighteen months ago.
What to do now: For any live deal or target under evaluation, rerun the model at $95, $110 and $130 Brent with a 6-month duration assumption for each. Stress-test the working capital requirement — targets may be hoarding inventory or running on depleted stock, neither of which represents normal working capital. For carve-outs specifically, insist on standalone energy cost modelling before signing, not after. And build explicit energy price adjustment mechanisms into earnout or deferred consideration structures.
3. If You Are Exiting or Preparing an Energy-Intensive Asset for Sale
If you are mid-process on a sale of an energy-intensive portfolio company, the buyer’s model just changed — and they know it. You have three options: pause, reprice, or reposition the narrative.
Pausing is not inherently weak. If your asset is directly energy-exposed, a sale process launched into the current environment will attract lower bids, wider diligence scopes, and protracted timelines. Returning in Q3 or Q4 when Brent may have eased may preserve more value than accepting a discounted bid today.
Repricing means accepting a lower headline number but structuring the deal to capture upside if conditions normalise. This is where earnout and deferred consideration mechanisms earn their keep. Structure the deferred component against normalised energy costs, with clear definitions and transparent adjustment formulas.
Repositioning the narrative is the most underutilised lever. If your portfolio company has taken proactive steps to manage energy exposure — hedging programmes, contract repricing, operational efficiency initiatives, supplier diversification — those actions are now worth materially more to a buyer than they were a month ago. The companies that can demonstrate operational resilience under stress will attract premiums even in a challenged environment.
On the other side of the ledger, defence, cybersecurity and energy infrastructure assets are repricing upward. If you hold assets in these sectors, this may be the optimal exit window.
What to do now: Reassess the exit timeline for every portfolio company in preparation. Model the bid-ask gap at current energy prices versus your pre-conflict expectations. For energy-exposed assets, extend working capital models by 90 days and stress-test covenant headroom. For assets that benefit from the current environment, accelerate — the window is open, but sentiment shifts fast.
The Bigger Picture
With Brent having risen more than 50% from pre-conflict levels, these are not hypothetical effects. They are repricing supply chains, compressing margins, widening lending spreads, and changing the calculus on every energy-sensitive deal in the market.
The PE firms and corporate acquirers that handle this well will be those that treat energy exposure as a first-order strategic variable — not a line item buried in the operating model. They will stress-test rigorously, act early on operational levers, and structure deals that account for a world where commodity assumptions are no longer stable.
The IEA has released 400 million barrels of emergency reserves — the largest coordinated release in its 50-year history — and the market barely flinched. Plan accordingly.
Aethon Ventures provides management consulting to PE/VC funds, mid-market businesses and corporate development teams across Growth, Profitability, M&A and Transformation. London-based with consulting partnerships in India and Malaysia.
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