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Iran peace deal could flood the market with oil — short crude oil funds as prices drop

A proposed peace deal between the U.S. and Iran could reopen a critical shipping route for oil. If this happens, the global oil supply will increase significantly, which usually causes oil prices to drop quickly.

Idea

Oil prices have been inflated by the risk of war in the Middle East, with some experts warning prices could hit $150 a barrel if the conflict continues. However, a sudden peace deal would instantly remove this 'risk premium' as oil flows freely again. The stock market is already rallying on this news. A sudden reopening of the Strait of Hormuz would likely trigger a sharp sell-off in oil prices as global supply fears vanish.

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USO1D#macro#oil#geopolitics

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