Oil crashes 20% from peak as Iran peace deal nears — short energy while the Strait of Hormuz reopens
Oil has fallen 20% from its 2026 peak as President Trump signals the U.S. is close to a ceasefire deal with Iran. If the Strait of Hormuz — the world's most important oil shipping route — reopens, the supply flood could push prices even lower.
Idea
The Iran war in February triggered an energy crisis by shutting down the Strait of Hormuz, through which roughly a fifth of the world's oil flows daily. Now Trump is publicly saying a deal is close, and oil has already dropped 20% from its crisis peak — but if a formal ceasefire is signed and the strait actually reopens, the sudden return of that supply could drive prices down sharply again. Government bonds are already having their best week since the war began precisely because traders see lower energy costs ahead. Energy stocks like Exxon and Chevron, which rallied during the oil spike, are particularly vulnerable to giving back those gains as crude keeps falling. The trade isn't without risk — a deal could fall apart — so keeping a tight stop-loss is important.