Oil crashing 20% on Iran peace hopes — short energy stocks as the Strait of Hormuz reopens
Oil prices have crashed 20% from their 2026 peak as President Trump signals a ceasefire deal with Iran is close. If the Strait of Hormuz — the world's most important oil shipping lane — reopens, the energy shock that drove prices up could unwind further.
Idea
Oil spiked earlier this year when the Iran war forced the Strait of Hormuz shut, choking off global supply. Now Trump is publicly saying a deal is imminent, and prices have already fallen 20% from the peak. If a ceasefire actually materializes and the strait reopens, the supply shock that inflated energy prices reverses — and oil-linked stocks like those in the energy sector ETF (XLE) could slide even further. The trend is already moving in that direction, and the market is pricing in more downside.