The Iran Deal Crossroads: Bet on Oil or Defense—Here’s How to Play the Geopolitical Tipping Point

This is the moment, folks—the U.S.-Iran nuclear talks are at a cliffhanger. With Trump’s 60-day deadline expiring in June and Europe’s August snapback threat looming, the market faces a binary outcome: a deal or a blowup. Your portfolio’s fate hinges on which path we take. Let me break down the plays—and why you need to act now.

The Two Paths: Oil’s Fate and Defense’s Rally

Scenario 1: The Deal Happens—Short Oil, Hedge with Defense

If the U.S. and Iran agree, sanctions will vanish, unleashing 1 million barrels per day of Iranian crude onto global markets. Oil prices—already volatile—will crash.

Action stations: Short Exxon Mobil (XOM) and Chevron (CVX). These giants are overexposed to oversupply. But hedge your bets: defense stocks could still climb due to lingering geopolitical risk. Why? Even a deal won’t erase tensions with Iran’s rivals, like Israel.

Scenario 2: Talks Collapse—Go Long on Defense and Oil

If negotiations blow up, military escalation looms. Israel’s threats to strike Iranian nuclear sites, combined with Trump’s “hard blow” rhetoric, could ignite a crisis. Oil prices would soar as the Strait of Hormuz—a chokepoint for 20% of global oil—faces disruption.

Action stations: Buy the ProShares Ultra Oil & Gas ETF (UGA) to double down on oil volatility. For defense, lock in gains with Lockheed Martin (LMT) and Raytheon Technologies (RTX). Their missile defense and drone systems will be in demand if a conflict erupts.

The Uranium Wildcard—A Secondary Play

A deal would require Iran to abandon high-enriched uranium, while sanctions relief might open doors for global nuclear energy projects. Cameco Corp (CCJ)—a top uranium miner—could see a modest bump if demand for low-enriched fuel rises. But this is a smaller bet compared to oil and defense.

The Geopolitical Risk Premium—Why Defense Wins Either Way

Even if a deal is struck, investors will demand higher returns for exposure to volatile regions. Defense stocks already trade at premiums due to Middle East tensions. A collapse would only amplify that.

Bottom Line: Position Now—Before June’s Deadline

• If you think a deal is done: Short oil majors, keep a sliver of defense stocks for insurance.
• If you believe talks fail: Overweight defense and oil volatility plays.

The clock’s ticking. The Strait of Hormuz isn’t just a chokepoint for oil—it’s a chokepoint for your portfolio. Act now, or risk getting left behind.

This is the time to be decisive. Don’t be a bagholder when the dust settles.