Oil crashes 20% as Iran peace deal looms — keep shorting energy stocks while the flush continues
Oil prices have crashed over 20% in May alone as the U.S. and Iran appear close to a peace deal that could reopen the Strait of Hormuz, a critical shipping route. President Trump says a 'final determination' on the deal is imminent.
Idea
Oil has already fallen more than 20% this month, making it the worst monthly drop since 2020, and the selling may not be over. The catalyst is clear: Trump says a U.S.-Iran peace deal is imminent, which would reopen the Strait of Hormuz and unleash a massive amount of oil supply back onto world markets. When a geopolitical premium unwinds this fast, energy stocks like Chevron and the broader energy sector ETF (XLE) tend to keep sliding because their profits are directly tied to the price of crude. Until the deal is formally signed there's still downside momentum, and even after signing the flood of new supply will keep pressure on prices.