Iran shuts critical oil shipping lane — load up on oil ETFs before prices spike
Iran has reportedly closed the Strait of Hormuz, a narrow waterway that carries about a fifth of the world's daily oil supply. That kind of sudden supply threat tends to send oil prices sharply higher as traders panic about shortages.
Idea
The Strait of Hormuz is the single most important oil chokepoint in the world — roughly 20 million barrels a day flow through it. When a major military force announces its closure, oil markets react first and ask questions later because any actual disruption creates an immediate physical shortage. Energy ETFs and oil futures typically gap up and continue rallying for days as hedge funds and commercial buyers scramble for supply. Even if the closure proves temporary, the geopolitical risk premium tends to stick.