Below the Trendline: Oil Price Shocks, the Strait of Hormuz Crisis, and the Disrupted Growth Trajectory of Global Health Sector Equities (2024–2026)
DOI:
https://doi.org/10.65166/emmhmm48Keywords:
oil price shock, health sector equities, Strait of Hormuz, geopolitical risk, XLV, trendline deviation, pharmaceutical supply chain, S&P 500Abstract
The escalation of armed conflict in the Middle East and the resulting disruption to oil transit through the Strait of Hormuz have produced a major commodity price shock. Brent crude oil prices surged from approximately $73.86 per barrel in December 2024 to over $112 per barrel by March 2026, a rise of roughly 52 percent in under 15 months. This study investigates the extent to which this geopolitical energy shock has disrupted the growth trajectory of global health sector equities, using the Health Care Select Sector SPDR ETF (XLV) as a sector proxy benchmarked against the S&P 500. Employing a trend-deviation analytical framework, the study projects expected sector performance based on XLV's historical compound annual growth rate of 10.25 percent, then compares that projection against actual observed performance as of March 2026. Results indicate that XLV was trading approximately 4.5 percent below its expected trendline value, compared to a 1.8 percent shortfall observed in the S&P 500. This differential—an excess disruption penalty of roughly 2.7 percentage points—is attributed to the sector's dual exposure to oil-price-sensitive cost inputs and demand-side compression driven by household budget constraints during inflationary episodes. The findings indicate that energy shocks are not neutral for defensive sectors, with implications for portfolio strategy, pharmaceutical supply chain policy, and health equity in oil-importing economies.
Downloads
References
Acemoğlu, D., Finkelstein, A., & Notowidigdo, M. (2009). Income and Health Spending: Evidence from Oil Price Shocks. The Review of Economics and Statistics, 95(4), 1079. https://doi.org/10.1162/rest_a_00306
Aisen, A., & Veiga, F. J. (2011). How Does Political Instability Affect Economic Growth? European Journal of Political Economy, 29, 151. https://doi.org/10.1016/j.ejpoleco.2012.11.001
Akhtar, Z. B. (2024). Advancements within Molecular Engineering for Regenerative Medicine and Biomedical Applications an Investigation Analysis towards A Computing Retrospective. Journal of Electronics Electromedical Engineering and Medical Informatics, 6(1). https://doi.org/10.35882/jeeemi.v6i1.351
Atento, A. G., & Atento, R. G. (2025c). A case study of Mercury Drug Corporation: Strategic adaptation to universal healthcare and digital disruption in the Philippines. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/zhw7dd39
Atento, R. G. (2025). Valuation metrics, market efficiency, and investor sentiment: A descriptive analysis of Philippine Stock Exchange–listed firms. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/6kbeat87
Atento, R. G. O., & Atento, A. G. B. (2025a). Which fundamentals differentiate Philippine stock winners from laggards? A rank-based multinomial analysis of 2025 price appreciation. International Journal of Health and Business Analytics, 1(2), 1–18. https://doi.org/10.65166/n7t3ew73
Atento, R. G., & Atento, A. G. (2025b). Global equity valuation dispersion: Evidence from P/E benchmarks, percentile positioning, and trend margins. International Journal of Health and Business Analytics, 1(2), 1–15. https://doi.org/10.65166/2pd5k207
Atento, R. G., Quinto, L., Espelita, C. A. M., & Castaneda, C. (2025). Integrating business and health analytics: A conceptual framework for dual outcomes in healthcare. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/04pdc866
Beber, A., Brandt, M. W., & Kavajecz, K. A. (2011). What Does Equity Sector Orderflow Tell Us About the Economy? Review of Financial Studies, 24(11), 3688. https://doi.org/10.1093/rfs/hhr067
Berkman, H., Jacobsen, B., & Lee, J. B. (2011). Time-varying rare disaster risk and stock returns. Journal of Financial Economics, 101(2), 313. https://doi.org/10.1016/j.jfineco.2011.02.019
Chatziantoniou, I., Gabauer, D., & Stenfors, A. (2025). US sectoral stock market volatility and geopolitical risk categories. Finance Research Letters, 76, 106916. https://doi.org/10.1016/j.frl.2025.106916
Chen, T., Chu, F., Zhang, J., & Sun, J. (2023). Sustainable collaborative strategy in pharmaceutical refrigerated logistics routing problem. International Journal of Production Research, 62(14), 5036. https://doi.org/10.1080/00207543.2023.2283566
Del Mundo, F., & Atento, R. G. O. (2025). Fundamental and technical indicator analysis of San Miguel Corporation: Financial performance, market behavior, and investment evaluation. International Journal of Health & Business Analytics, 1(2), 1–25. https://doi.org/10.65166/6vdtp816
Dela Costa, V., & Atento, R. G. O. (2025). Financial Performance and Market Viability of Globe Telecom, Inc.: An Integrated Fundamental--Technical Analysis. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/v5x9d097
Diallo, E. M. S. (2021). Three essays on progress towards universal health coverage in developing countries [French National Centre for Scientific Research]. In HAL (Le Centre pour la Communication Scientifique Directe). https://theses.hal.science/tel-04102088
Drechsel, D., Mikosch, H., Sarferaz, S., & Bannert, M. (2015). Macro and Micro Level Impulse Responses: A Survey Experimental Identification Procedure. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2618994
Eriksson, T. (2021). Promises and pitfalls of value-based reimbursement in healthcare : A mixed method health economic approach. In Linköping University medical dissertations. Linköping University Electronic Press. https://doi.org/10.3384/9789179290450
Eriksson, T., Levin, L., & Nedlund, A. (2022). The introduction of a value‐based reimbursement programme—Alignment and resistance among healthcare providers. The International Journal of Health Planning and Management, 38(1), 129. https://doi.org/10.1002/hpm.3574
Espelita, C. A. M., Atento, R. G., Rao, L. J., & Tian, Y. (2025). Understanding monetary policy: Student awareness, perceptions, and financial behaviors in the Philippine context. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/f7eayj47
Fama, E. F., & French, K. R. (1997). Industry costs of equity. Journal of Financial Economics, 43(2), 153. https://doi.org/10.1016/s0304-405x(96)00896-3
Feldman, R. (2023). Trade Secrets in Biologic Medicine. Science and Technology Law Review, 24(1), 1. https://doi.org/10.52214/stlr.v24i1.10455
Frumkin, H., Hess, J., & Vindigni, S. M. (2009). Energy and Public Health: The Challenge of Peak Petroleum [Review of Energy and Public Health: The Challenge of Peak Petroleum]. Public Health Reports, 124(1), 5. SAGE Publishing. https://doi.org/10.1177/003335490912400103
Häfner, M., Raimondi, P. P., & Bonometti, B. (2023). Geopolitics of Oil and Gas in the MENA Region. In Perspectives on development in the Middle East and North Africa (MENA) region (p. 265). Springer International Publishing. https://doi.org/10.1007/978-3-031-30705-8_5
Hamilton, J. D. (1983). Oil and the macroeconomy since World War II. Journal of Political Economy, 91(2), 228. https://doi.org/10.1086/261140
Hess, J., Bednarz, D., Bae, J., & Pierce, J. (2011). Petroleum and Health Care: Evaluating and Managing Health Care’s Vulnerability to Petroleum Supply Shifts. American Journal of Public Health, 101(9), 1568. https://doi.org/10.2105/ajph.2011.300233
Jones, C. M., & Kaul, G. (1996). Oil and the Stock Markets. The Journal of Finance, 51(2), 463. https://doi.org/10.1111/j.1540-6261.1996.tb02691.x
Kilian, L., & Park, C. (2009). THE IMPACT OF OIL PRICE SHOCKS ON THE U.S. STOCK MARKET*. International Economic Review, 50(4), 1267. https://doi.org/10.1111/j.1468-2354.2009.00568.x
Kisner, C., & Browning, T. (2021). Cold chain logistics and pharmaceutical distribution: Cost and carbon implications of temperature-controlled supply chains. Journal of Supply Chain Management, 57(3), 45. https://doi.org/10.1111/jscm.12250
Klement, J. (2021). Geo-Economics: The Interplay between Geopolitics, Economics, and Investments. https://doi.org/10.56227/22.1.4
Lantin-Magana, L., Espelita, C. A. M. H., Calingasan-Habana, C. A., Atento, A. G. B., & Atento, R. G. O. (2026). Predictors of investment decision among selected individuals in key cities of Laguna: An extended Theory of Planned Behavior approach. Journal of Enterprise Strategy & Management Innovation, 1(1). https://doi.org/10.65166/a60b0c75
Liu, Y., Hou, J., & Cai, C. (2025). Research on the optimization of cold chain logistics distribution routes considering time-dependent networks and simultaneous pick-up and delivery from the perspective of sustainability. PLoS ONE, 20(9). https://doi.org/10.1371/journal.pone.0330535
Luo, X., Zhang, H., & Chen, Y. (2019). Petrochemical dependence in pharmaceutical API manufacturing: A supply chain risk assessment. International Journal of Production Economics, 209, 12. https://doi.org/10.1016/j.ijpe.2018.07.022
Majdin, M. F. M., Rahmah, A., & Yaapar, Md. S. (2023). KEMANUSIAAN the Asian Journal of Humanities. https://doi.org/10.21315/kajh2023.30.2
Mangubat, M. M., & Atento, R. G. O. (2025). Integrated fundamental–technical evaluation of Jollibee Foods Corporation: Financial performance, market behavior, and investment outlook. International Journal of Health and Business Analytics, 1(2). https://doi.org/10.65166/azkk2x82
Milewska, B., & Milewski, D. (2022). Implications of Increasing Fuel Costs for Supply Chain Strategy. Energies, 15(19), 6934. https://doi.org/10.3390/en15196934
Nassè, T. B., Ansong, I., & Naatu, F. (2025). Regulatory compliance and procurement practices: insights from pharmaceutical companies in Kumasi. International Journal of Pharmaceutical and Healthcare Marketing, 20(1), 64. https://doi.org/10.1108/ijphm-03-2025-0029
Nona, R. G., & Atento, R. G. (2025). Integrating fundamentals and technicals: Investment attractiveness of Puregold Price Club, Inc. International Journal of Health & Business Analytics, 1(1). https://doi.org/10.65166/e0y0mb43
Okun, A. M. (1962). Potential GNP: Its measurement and significance. Proceedings of the Business and Economic Statistics Section, American Statistical Association, 98.
Osho, G. S. (2024). A Generalized Autoregressive Conditional Heteroscedasticity GARCH for Forecasting and Modeling Crude Oil Price Volatility. Journal of Applied Business and Economics, 26(6). https://doi.org/10.33423/jabe.v26i6.7385
Pokorny, L. (2026). Economic Consequences of the Power Vacuum in Iran: Analysis of Energy Sector Disruption Following the February 2026 Leadership Decapitation. Zenodo (CERN European Organization for Nuclear Research). https://doi.org/10.5281/zenodo.18854655
Rizan, C., Mortimer, F., Stancliffe, R., & Bhutta, M. F. (2020). Plastics in healthcare: time for a re-evaluation. Journal of the Royal Society of Medicine, 113(2), 49. https://doi.org/10.1177/0141076819890554
Sadorsky, P. (1999). Oil price shocks and stock market activity. Energy Economics, 21(5), 449. https://doi.org/10.1016/s0140-9883(99)00020-1
Shenoy, S. R., Wagdarikar, M. J., & Desai, N. D. (2024). Polymers in medical devices and pharmaceutical packaging. In Elsevier eBooks (p. 333). Elsevier BV. https://doi.org/10.1016/b978-0-323-95496-9.00009-0
Tapsoba, P. Y. (2017). Sustainable health financing for progress towards universal health coverage in low- and middle-income countries. HAL (Le Centre Pour La Communication Scientifique Directe). https://theses.hal.science/tel-02121742
Teo, A. J. T., Mishra, A., Park, I., Kim, Y., Park, W., & Yoon, Y. (2016). Polymeric Biomaterials for Medical Implants and Devices. ACS Biomaterials Science & Engineering, 2(4), 454. https://doi.org/10.1021/acsbiomaterials.5b00429
Tsolakis, N., & Srai, J. S. (2018). Mapping supply dynamics in renewable feedstock enabled industries: A systems theory perspective on ‘green’ pharmaceuticals. Operations Management Research, 11, 83. https://doi.org/10.1007/s12063-018-0134-y
U.S. Energy Information Administration. (2026). Short-term energy outlook. https://www.eia.gov/outlooks/steo/
Yu, R., Yun, L., Chen, C., Tang, Y., Fan, H., & Qin, Y. (2023). Vehicle Routing Optimization for Vaccine Distribution Considering Reducing Energy Consumption. Sustainability, 15(2), 1252. https://doi.org/10.3390/su15021252
Yu, Y. B., Briggs, K. T., Taraban, M. B., Brinson, R. G., & Marino, J. P. (2021). Grand Challenges in Pharmaceutical Research Series: Ridding the Cold Chain for Biologics. Pharmaceutical Research, 38(1), 3. https://doi.org/10.1007/s11095-021-03008-w
Zhao, S., Xie, Q., Lu, Q., Jiang, X., & Chen, W. (2015). Coherence and incoherence collective behavior in financial market. EPL (Europhysics Letters), 112(2), 28002. https://doi.org/10.1209/0295-5075/112/28002
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Ramon George O. Atento, PhD, Andrea Gwyneth Atento, Cherry Ann Marie H. Espelita, MBA (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Authors retain copyright of their articles but grant the International Journal of Health & Business Analytics (IJHBA) the right of first publication.
