Oil crashing on Iran peace deal hopes — bet against crude as Strait of Hormuz could reopen
Oil prices just suffered their worst month in six years. President Trump says a deal to end the Iran conflict is imminent, which could reopen the Strait of Hormuz — the world's most important oil shipping route that's been blocked since the war started in February.
Idea
The Strait of Hormuz has been shut since February's Iran war, choking global oil supply. Now Trump is signaling a final decision on a peace deal is imminent. If the strait reopens, a massive amount of oil supply hits the market at once — think of it like unclogging a pipe. Brent crude is already posting its worst month in six years on the speculation alone, but the real price drop could come when a deal is officially signed. Oil stocks like those in XLE still have further to fall because their current prices reflect a world where Hormuz stays closed.