Oil at $105 and Rising: The Market's Iran Playbook Is 'Do Nothing' — But Here's What's Actually Moving
Geopolitical fog, $130 oil warnings, and a gold-to-crypto trade that Tom Lee is calling a 'money trade' — the macro picture is messy but the signals are there
Ticker Ratings
The market's dominant narrative right now has one sentence: oil up, stocks down, repeat until deal. Brent crude is sitting at $105.67/barrel — up nearly 40% since the US-Iran conflict began — with Solus's Dan Greenhaus warning on CNBC that $130-$140 is not impossible if Kharg Island or the Strait of Hormuz gets disrupted. Bloomberg's strategic energy team is throwing out a $154 scenario if Hormuz stays closed through mid-June. Iran, for its part, is demanding sovereignty over the Strait and war reparations, so... negotiations are going great.
In this fog, the tactical plays are narrow. Josh Brown flagged $VLO and refiners as the clearest working trade — energy is the one sector not just chopping sideways. Deutsche Bank's Ozan Tarman says the 'pain trade' actually favors an equity rally and falling oil, meaning the crowded bearish positioning could snap back hard. Meanwhile, Tom Lee is out here calling a short gold / long crypto trade a 'money trade' for the next year, right as gold sells off from $5,500/oz highs as traders liquidate to cover losses elsewhere. Malcolm Etheridge's warning is the one to bookmark though: earnings may look fine, but CEO guidance is about to get ugly as transportation and energy input costs bite.
A generation of investors trained to buy every dip is meeting a conflict where the OECD is calling for US inflation at 4.2%, airfares on Asia-Europe routes are up 560%, and the Pentagon is reportedly still weighing whether to escalate. The best trade might genuinely be doing nothing — but refiners don't care about your existential crisis.