Oil crashing 20% on Iran ceasefire hopes — short the energy names that still look expensive
Oil prices have fallen 20% from their 2026 highs after President Trump signaled the U.S. is close to a ceasefire deal with Iran. If the deal goes through, the Strait of Hormuz — a narrow waterway that carries about a fifth of the world's oil — could reopen, flooding the market with supply.
Idea
The Strait of Hormuz has been shut since the Iran conflict started in February, squeezing global oil supply and keeping prices elevated. Now Trump is publicly saying a deal is close, and oil has already dropped 20% on the expectation. If a ceasefire is actually announced, the strait reopens and a huge amount of trapped oil supply hits the market — prices could fall sharply. Even the rumor is enough to keep pressure on oil stocks, because energy companies' profits are directly tied to the price of crude.