This is the 40th time Trump has said the US-Iran agreement is about to be reached.
Although we have become almost immune to Trump's words, this time the progress is more certain than in the past.
On June 14, Pakistani Prime Minister Sharif announced a peaceful agreement between the US and Iran. Trump later confirmed, stating that the naval blockade would be lifted, allowing free passage through the Strait of Hormuz. Iran's Deputy Foreign Minister also said the agreement text has been finalized, and war and military actions will cease immediately, including towards Lebanon.
The Asian markets gave a direct answer when they opened on Monday. Tokyo and Seoul's main indices surged over 5% at one point, oil prices dropped by $3 per barrel, and Brent fell to around $84. The logic is simple: the geopolitical risk premium that has been weighing on energy prices for the past three and a half months is being quickly squeezed out by the market.
Although this is not yet a finalized peace agreement. The key signing is scheduled for June 19 in Switzerland, and both the US and Iran have different understandings of the agreement. The US says the strait will be open free of charge, while Iranian media states that maritime traffic will be coordinated by Iran and Oman, with a return to normal within 30 days as per "Iran's arrangement." Israel was still striking Beirut around the time of the agreement's announcement. The hard issues of the nuclear problem, enriched uranium, and sanction exemptions have all been pushed to the back for a 60-day negotiation window.
But it is more accurate to say that the conflict has now largely shifted from the military domain to negotiations.
The importance of the Strait of Hormuz goes without saying. About one-fifth of the world's oil and a large amount of LNG pass through this waterway. After the US-Israel strike on Iran on February 28, Iran retaliated with missiles, drones, and maritime restrictions, gradually transforming the strait from a "risky passage" to a "de facto blocked passage." For over three months, the market has been worried about a triple lock: Iran using the strait as a bargaining chip, the US blockading Iranian ports, and the Iranian-Israeli-Hezbollah front making it hard for Iran to budge domestically. With three lines tangled together, no one could move.
Now the strait is officially beginning the reopening process. According to assessments from energy experts cited by AP, even if the agreement takes effect, it may still take several months for oil and gas supplies to return to normal. Ships, insurance, refineries, demining, and security all require time. The oil tankers stranded in the Persian Gulf will not set sail immediately due to a mere statement, and insurance companies and shipowners will not overnight revert their risk assumptions to pre-conflict levels.
For us as investors, the most important question is, what financial products can we trade now?
What Is the Market Trading After the Strait Reopens?
Over the past few months, crude oil, natural gas, shipping insurance, aviation fuel, fertilizer, and inflation expectations have all been given an additional layer of Middle East risk premium. Now, if the agreement is signed as planned on June 19, with vessels gradually resuming passage, the first assets to be affected will be these.
Some of the current price data already reflects this very quickly. MarketWatch reports that after the agreement news came out, Dow Futures surged over 350 points, S&P 500 Futures rose by about 1%, and Nasdaq 100 Futures increased by around 1.6%. WTI dropped below $81, while Brent fell to around $83.5. Axios's figures put Brent at around $84.21, and the U.S. gasoline price also fell from around $4.56/gallon in May to about $4.07.
More specifically, what else can we trade?
First, shorting the crude oil risk premium. CBA Commodities Analyst Vivek Dhar gave an assessment in a WSJ-cited report: If the Strait of Hormuz remains open, Brent may fall back to around $80 by the end of the year. His key assumption is that as long as the strait's oil flow recovers to 60%-70% of pre-war levels, coupled with non-OPEC+ supply growth and the presence of alternative pipelines, the market may return to pricing in a somewhat oversupplied scenario. A Brent price of $80 means what? It means that the $15 to $20 premium added in the past three months due to the war may be systematically squeezed out.
Second, going long on the aviation, cruise, and tourism chain. Fuel costs are down, profit margins are recovering; this line is the most direct. IATA had just cut its 2026 global airline industry net profit forecast from $410 billion to $230 billion, all because of the skyrocketing aviation fuel prices. Barron's said IATA expects this year's total aviation fuel costs to reach $350 billion. Now that oil prices have dropped from the range of $90 to $100 to the low $80s, airline stocks have the greatest elasticity. Target assets worth watching include the airline ETF JETS and DAL (Delta Air Lines), UAL (United Airlines), AAL (American Airlines), LUV (Southwest Airlines). In the cruise direction, there are CCL (Carnival Corporation), RCL (Royal Caribbean Group), NCLH (Norwegian Cruise Line Holdings). As of the closing on June 12, DAL was at $83.06, UAL at $115.52, AAL at $14.98, LUV at $45.47, CCL at $29.18, NCLH at $19.43. If oil prices continue to trade at low levels before the U.S. market opens, airlines and cruise companies are likely to be the first places where pre-market funds flow into.
Third, bullish on Asian energy importers. Japan, South Korea, India, and China are all direct beneficiaries of the oil and gas price drop in the Middle East. Commerzbank Research mentioned in a WSJ report that Asian currencies strengthened in the early session, with the USD falling to around 159.93 against the JPY, around 1505.60 against the KRW, and the AUD rising to around 0.7079. NAB Chief Economist Sally Auld's view is that the fall in oil prices has eased inflationary pressures in Japan, a major energy-importing country, leading to a rise in Japanese 10-year government bond futures. Trading strategies could involve bullish positions in Japanese stocks, South Korean stocks, Indian stock indices, as well as bullish positions in Asian importers' currencies and bonds.
Fourth, bullish on bond duration, bearish on inflation expectations. The drop in oil prices will directly lower costs for gasoline, aviation, logistics, and some food, and also weaken market concerns about central banks maintaining high interest rates. Monitoring TLT, U.S. 10-year Treasury yields, TIPS breakeven rates, and gold could be key. Gold is particularly noteworthy here: if the market believes the strait reopening is genuine, the safe-haven premiums of gold and oil will fall together; if the June 19 signing fails, both will rebound simultaneously. Gold serves as a hedge indicator in this trade, not a directional one.
Fifth, repricing of the LNG, fertilizer, and chemical chain. If Qatari LNG passes through the Strait of Hormuz, the strait's reopening will reduce the risk premium for Asian and European LNG, benefiting gas-to-liquids companies, chemical companies, and some industries sensitive to electricity costs. The Middle East is also a significant supplier of fertilizers like urea and ammonia, so the resumption of navigation implies a downward pressure on the prices of agricultural inputs. This line of thinking is more macro-chain-oriented, benefiting downstream chemical and agricultural cost-sensitive industries, rather than specific stocks.
Polymarket's markets can serve as a "probability thermometer." The price for "Yes" on a US-Iran nuclear deal by June 30 is around 0.84, indicating an 84% probability assigned by the market. The price for "Yes" on a US-Iran nuclear deal before 2027 is around 0.945. The price for "Yes" on "Will the U.S. invade Iran before 2027" is only around 0.115. "Iran Nuke before 2027" is around 0.0735. "Will the Iranian regime fall by June 30" is around 0.0065. These numbers suggest that while there is a high probability of a short-term agreement, long-term tail risks remain. The market is betting on a de-escalation but is not going all-in.
If a watchlist is to be compiled for pre-market U.S. stocks, here are some items the editor has organized:
First Group, the most direct beneficiary of lower fuel costs: JETS, DAL, UAL, AAL, LUV, CCL, RCL, NCLH.
Second Group, beneficiaries of risk appetite recovery, especially small-cap and cyclical stocks: SPY (S&P 500 ETF), QQQ (Nasdaq 100 ETF), IWM (Russell 2000 Small-Cap ETF).
Third Group, companies benefiting from cost reduction but with slower elasticity: FDX (FedEx), UPS (United Parcel Service), DOW (Dow Inc.), LYB (LyondellBasell).
Conversely, XOM (ExxonMobil), CVX (Chevron), SLB, HAL (Halliburton), XLE (Energy Select Sector SPDR Fund), these upstream energy and oilfield service stocks are more likely to be under pressure in the short term. They were previously beneficiaries of high oil prices and war premiums, but as the premiums are squeezed out, their logic needs to be reevaluated.
Lastly, let's talk about risk. The biggest fear in this trade is not "the oil price has already dropped," but "the agreement has not been truly implemented yet." Signed on June 19th, clearing the mines at sea, a decrease in insurance rates, resumption of ship passage, the implementation of a coordination mechanism between Iran and Oman – all these steps need to be validated one by one. Several key signals worth tracking: Can Brent break below $80, can WTI break below $78, can airline and cruise stocks hold their gains after opening high, and can Polymarket's Iran agreement market stay above 80%.
If all these conditions are met, it indicates that the market is transitioning from "war impact" to "supply recovery."
If the oil price rebounds to $88 to $90, or if the Polymarket agreement probability quickly drops, it's time to reduce positions in this reflation trade.
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