Oil's worst month in six years and an Iran deal is near — bet on crude falling further
Oil prices just suffered their worst month in six years because President Trump says the U.S. is very close to a deal with Iran. If a deal happens, the Strait of Hormuz — the narrow waterway where about a fifth of the world's oil passes — could reopen, which would unleash a flood of supply into the market.
Idea
Brent crude is already down huge — its worst month in six years — but the actual catalyst hasn't even happened yet. Trump says a 'final determination' on an Iran deal is imminent, and if it goes through, the Strait of Hormuz would reopen after being shut since the Iran war started in February. That waterway handles roughly 20% of global oil shipments, so reopening it would be like turning on a firehose of supply. Oil has been sliding on anticipation, but the real price drop tends to accelerate once the news becomes official and large funds reposition. This is a classic case where the market has started pricing in an event but hasn't finished — there's still room to fall.