Oil crashing on Iran peace hopes — ride the slide on oil stocks and ETFs
Oil prices have crashed over 20% in May as the U.S. and Iran edge closer to a peace deal, which could reopen the Strait of Hormuz and unleash a flood of oil supply back onto the world market.
Idea
Oil has already fallen 20% this month, but the actual peace deal hasn't been signed yet — it's only being discussed. If the deal goes through, the Strait of Hormuz reopens and Iranian oil floods back into a market that's already oversupplied, pushing prices even lower. Even if talks stall, the market has repriced oil dramatically lower and the trend is firmly down. Large oil producers and oil-tracking ETFs still have room to fall as traders price in a world with cheaper energy. A tight trailing stop keeps risk manageable if geopolitical headlines cause sudden bounces.