A couple days ago, we had some parents from the neighborhood over for dinner. At some point the conversation shifted to what it cost to fill up their cars that week, and everyone had a number. $95. $110. One guy said he’d just paid over $6.00 a gallon in Orange County. The table got quiet for a second.
I drive electric, so I don’t feel it at the pump the same way. But I felt it in a different way, because I’ve been paying attention to what’s driving those prices, and it’s bigger than most people realize.
Here’s the short version. The U.S. and Israel struck Iran a few weeks ago. Iran retaliated by shutting down the Strait of Hormuz, a narrow waterway that carries about a fifth of the world’s oil. Shipping through it has basically stopped. Oil prices spiked past $120 a barrel. And nobody’s quite sure when it gets resolved.
For most people, that’s where the thinking ends. You see the headlines, maybe notice gas prices, and get back to your day.
But I’ve been investing in oil and gas for a few years now, and what I’ve learned in that time has changed how I think about these kinds of events. Not just as news, but as something that directly affects inflation, interest rates, real estate valuations, and honestly, every investment in your portfolio whether you realize it or not.
I wanted to get a clearer picture of what’s actually happening, so I set up an interview with Troy Eckard. Troy is the founder and chairman of Eckard Enterprises, a firm that helps investors directly own U.S. oil and gas assets. He’s been in this business for nearly 40 years. Every time we talk, I learn something new, and this conversation was no exception. (You can listen to our full conversation on this week’s podcast.)
Disclaimer: This article is for informational and educational purposes only and does not constitute financial, legal, or investment advice. Any investment involves risk, and you should consult your financial advisor, attorney, or CPA before making any investment decisions. Past performance is not indicative of future results. The author and associated entities disclaim any liability for loss incurred as a result of the use of this material or its content.
Why This Matters Beyond the Gas Station
Here’s something that shifted my thinking early on. When most of us hear “oil,” we think gasoline. Cars. Maybe heating. But a single barrel of crude oil touches almost every part of your daily life in ways you’d never guess.
The plastic syringes in your supply room. The latex and nitrile gloves you put on before every procedure. The asphalt on the road you drove to work on. The synthetic fabrics in your scrubs. The fertilizer that grew the food you ate for lunch. The packaging on basically everything you ordered online this month. Even the screens you’re reading this on require petroleum-based materials to manufacture.
Oil doesn’t just power the economy. It literally builds the physical world around us. When the price of a barrel moves, it’s not just about gas stations. It’s embedded in the cost of producing, packaging, and transporting almost everything.
That’s why oil price shocks lead to inflation so quickly. We saw it play out in 2022. Russia invaded Ukraine, oil spiked, and suddenly we were dealing with the worst inflation in decades. Mortgage rates climbed. Real estate valuations got hit. Financial plans that assumed low interest rates fell apart.
The current situation could follow a similar path. Goldman Sachs has already raised its inflation forecast and bumped up the probability of a recession this year. If oil stays elevated for a few months, we could be looking at inflation creeping back toward 4.5-6%.
For physicians who are invested in real estate, stocks, or really anything, this isn’t background noise. It directly affects returns, borrowing costs, and how far your dollar goes.
The question worth asking: do you have anything in your portfolio that actually benefits when energy prices rise?
An Asset Class Hiding in Plain Sight
This is where the conversation got really interesting for me, and I think it will for you too.
Most physicians I talk to have never heard of directly investing in mineral rights or working interests. I’m talking about 99 out of 100. At physician conferences, it’s the same story. Almost nobody in the room has been introduced to these opportunities.
I was the same way. When I first heard about oil and gas investing, it felt like a wild gamble. Something out of a movie where a guy in a cowboy hat convinces you to pour money into a hole in the ground. If it gushes, you strike it big, if not, you lose your money. I had no framework for understanding it, and honestly, no one in my financial circle had ever brought it up.
That last part turns out to be the main reason most physicians don’t know about this. The financial advisors and CPAs we work with don’t get compensated for recommending these types of investments. So they simply don’t mention them. It’s not a conspiracy. It’s just how incentives work.
Here’s how it works in plain terms.
Mineral rights means you own the minerals under a piece of land. When an oil company drills there, they pay you a royalty every single month. You don’t manage anything. There are no cash calls, no tenants, no maintenance. With modern drilling technology, these wells can produce for decades.
That said, it’s not without risk. Commodity prices fluctuate. Production from a given well declines over time. And you’re trusting the operator to do their job well. It’s not a savings account. But compared to what most people picture when they hear “oil and gas investing,” the reality of mineral rights ownership is a lot more boring, in a good way.
Working interests means you participate in the actual drilling of a well. The returns can be higher, and the tax benefits are significant. A large portion of drilling costs are 100% deductible in the year you invest, and yes, it can offset your day job income. For someone with a high W-2, that’s a meaningful tool. But working interests also carry more risk and more complexity. You can face cost overruns, dry wells, and ongoing expenses. It’s not for everyone, and it’s worth understanding the full picture before jumping in. I’d also highly recommend talking to your CPA to understand how it might benefit you.
Think of It Like Real Estate
If you’re already invested in real estate, which many in our community are, the concept of owning a tangible asset that generates income isn’t new to you. The comparison actually maps pretty closely. You own something real. You receive income from it. There are tax benefits. You care about who’s operating on your asset.
The structures are different, and each has its own tradeoffs. Real estate gives you more control, more leverage options, and the ability to force appreciation through improvements. Energy assets like mineral rights are more hands-off, but you’re also more dependent on commodity prices and the operator’s performance. Neither is inherently better. They just work differently.
What I find interesting is how they tend to behave during different market conditions. In inflationary periods, real estate can face pressure from higher interest rates and tighter lending. Energy assets, on the other hand, often benefit from the same environment that’s causing that pressure, because commodity prices tend to rise with inflation. When things stabilize, real estate typically recovers. They tend to counterbalance each other.
My own experience with energy investments has been pretty hands-off compared to some of my real estate deals, but that’s partly the nature of the asset. Every investment has its own set of risks and realities. The point isn’t that one is better than the other. It’s that most physicians I know have significant exposure to real estate and stocks, but almost zero exposure to energy. That’s a gap worth thinking about, not because energy is superior, but because concentration in any single asset class is a risk in itself.
You Don’t Need $125 Oil for This to Work
Here’s something that might surprise you. The oil industry doesn’t actually want sky-high prices. The sweet spot is somewhere around $75-90 a barrel. At that range, operators make great returns, the economy runs well on affordable energy, and investors do just fine.
I want to be clear about something. I invest in energy broadly, both oil and gas, and sustainable energy. I’d love to see solar, wind, and other renewables scale to meet a bigger share of global demand. That’s where I hope we’re headed, and I put my money there too.
But here’s the reality. Right now, renewables can’t meet global energy needs without significant subsidies, and demand for energy isn’t slowing down. If anything, it’s accelerating. Think about what’s happening with AI alone. The data centers powering the tools we’re all starting to use consume enormous amounts of electricity, and that demand is growing exponentially. The world needs more energy, period. And for the foreseeable future, fossil fuels are going to be a major part of how we get there.
That’s not a political statement. It’s just where the math lands today. And it means the long-term setup for energy investors is strong. Demand keeps growing. Reserves keep shrinking. Extraction gets more expensive. The floor on oil prices keeps moving up.
What’s happening right now with the Strait of Hormuz is a crisis, not a business plan. But it highlights how fragile the global supply really is.
That’s not a reason to panic-buy. This is something you build into your portfolio over time, the same way you’d build a real estate portfolio. Steadily. Intentionally.
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Where to Start
If this is new to you, that’s normal. It was new to me not that long ago. Here are a few next steps.
Listen to this week’s podcast episode where Troy and I go deeper on how this all works, what the current market means, and how physicians are actually using these strategies.
And as always, do your own diligence. Ask hard questions. Understand the structure before you invest. But don’t write off an entire asset class just because nobody in your financial circle ever mentioned it. That’s how the best opportunities stay hidden.
I’ll say this. Adding energy to my portfolio changed how I think about diversification. Not because it’s a magic bullet or the right move for everyone, but because it filled a gap I didn’t know was there. It’s one more tool. Whether it belongs in your toolkit depends on your situation, your risk tolerance, and how much time you’re willing to spend learning something new.
But at minimum, I think it’s worth understanding. Especially right now.
Disclosure: Eckard Enterprises is a sponsor of Passive Income MD. This post was not sponsored by Eckard, but I want to be transparent about that relationship. As always, I only feature people and companies I personally trust and invest with.
This post is for informational purposes only and does not constitute investment advice. Always consult with your financial advisor and conduct your own due diligence before making investment decisions.
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Peter Kim, MD is the founder of Passive Income MD, the creator of Passive Real Estate Academy, and offers weekly education through his Monday podcast, the Passive Income MD Podcast. Join our community at the Passive Income Doc Facebook Group.
