Iran deal could send oil prices into freefall — short energy stocks and ride the broad market rally
Oil prices just posted their worst month in six years because traders think a U.S.-Iran peace deal is imminent. If the Strait of Hormuz reopens — the world's most important oil shipping lane — oil could drop even further, and the broader stock market would likely keep rallying on relief.
Idea
The Iran conflict has been hanging over markets since February, when the Strait of Hormuz — where roughly 20% of the world's oil passes through — was effectively shut down. Now Trump says a 'final determination' on a deal is coming, and oil has already cratered to its worst month in six years. If a ceasefire is actually signed, two things happen: oil prices keep falling because the chokepoint reopens, and stocks keep climbing because one of the biggest geopolitical risks of 2026 gets removed. The trade is to bet against energy companies while betting on the broad market rallying on the relief.