Iran deal could reopen oil's biggest chokepoint — bet against energy stocks
Oil prices just had 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 world's most important oil shipping route, which has been blocked since the Iran war started in February — could reopen, flooding the market with oil again.
Idea
Oil is already down huge — posting its biggest monthly decline in six years — but the real trigger hasn't even happened yet. Trump says a 'final determination' on an Iran deal is imminent, and if the Strait of Hormuz reopens after being shut since February, millions of barrels of oil will flow back into the market. That's pure supply pressure pushing prices lower. Even oil companies like Chevron and Exxon would feel the squeeze as profit margins on each barrel shrink. The risk-reward favors waiting for the next leg down once a deal is officially announced.