Iran closed the Strait of Hormuz. Not partially. Not for maintenance. Closed it. Twenty percent of the world's oil passes through that waterway and Iran just put up a velvet rope like it's a nightclub in Miami.
The military says it reopens when the U.S. accepts their conditions. No word on what those conditions are. Could be nuclear deal stuff. Could be cash. Could be a formal apology written in calligraphy. Doesn't matter. What matters is some guy with a brokerage account just googled "how to trade crude oil futures" and is about to lose his mortgage payment.
The UAE says one of its ships got hit by an airstrike. Iran's presumably behind it. The strait's been threatened before but this time they actually did it. Closed the thing. Every oil tanker in the Persian Gulf is now playing the world's highest-stakes game of red light green light.
Retail traders are panic-buying oil ETFs. They're Googling "USO calls." They're texting their cousins about geopolitical risk premiums. They don't know what a contango is. They don't know where the Strait of Hormuz is on a map. They think Iran borders Mexico. But they know the line went up so they're buying.
Here's what happens next. Oil spikes. The spike lasts three days. Maybe four. Iran and the U.S. have a phone call. The strait reopens. Oil crashes back down. Every retail trader who bought at the top holds through the collapse because they read on Reddit that oil is going to five hundred dollars a barrel.
The Strait of Hormuz has been the world's most important choke point since before these people knew what a stock was. Now it's closed and they think they're going to retire off it.
They won't.
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