Buckle Up for a Brent Spike: How Geopolitics Could Send Oil to $110—and How to Play It

The Strait of Hormuz isn't just a shipping lane—it's the economic equivalent of a loaded gun. With 20% of the world's oil flowing through this narrow chokepoint, any disruption here isn't just a risk; it's a bomb waiting to detonate. And according to Goldman Sachs, the odds of that bomb going off are alarmingly high.

Let's break this down. Goldman's latest report slams the table with two cold, hard facts:
1. There's a 52% chance Iran shuts down the Strait of Hormuz this year, according to prediction markets like Polymarket.
2. If that happens, Brent crude could rocket to $110–$120 per barrel—and that's the conservative scenario.

This isn't theoretical. The U.S. military now gives a 65% chance of direct intervention in Iran by July 2025, and tensions with Israel are hotter than a refinery's catalytic cracker. So, what does this mean for your portfolio? Let's dive into the numbers—and the plays.

The Geopolitical Math: Why $110 Isn't a Stretch

Goldman's scenarios are stark. If the Strait is halved in capacity for a month—think minefields or targeted attacks—the immediate shock sends Brent to $110. But here's the kicker: even a partial disruption lasting months could push prices to $130+ if OPEC's spare capacity (just 2.5 million barrels/day) gets overwhelmed.

Meanwhile, a 1.75 million barrel/day drop in Iranian oil supply alone (without Strait closure) could still spike prices to $90–$95. And let's not forget the ripple effects: rerouting tankers around the Cape of Good Hope adds $1 million per voyage, squeezing refiners' margins and pushing costs onto consumers.

But here's the twist: OPEC+ has your back—up to a point. Their spare capacity can cushion smaller disruptions, but if Hormuz fully closes? Buckle up.

The Playbook: Stocks, ETFs, and Futures to Bet On (or Hedge Against)

1. Go Long on the Strait (Carefully)**

If you believe tensions escalate, direct oil exposure is your friend.
- ETFs:
- United States Oil Fund (USO): Tracks WTI futures. If prices hit $110, USO could surge—just check its leverage ratios first.

- Amplify Energy ETF (AMPL): Focuses on U.S. energy infrastructure, which thrives when supply routes shift.
- Futures:
- The VelocityShares 3x Long Crude ETN (DUG) gives triple leverage—but only for short-term bets.

2. Buy the Infrastructure That Survives the Storm**

The real winners here aren't just oil itself—they're the companies rerouting supply.
- Cheniere Energy (LNG): The king of U.S. LNG. If Hormuz closes, rerouted shipments flow through Cheniere's terminals.
- Kinder Morgan (KMI): Owns the pipelines and storage that U.S. shale and Gulf Coast exports rely on.

3. The Geopolitical Hedge: How to Protect Your Gains**

No one knows if this blows over or ignites. So hedge like your portfolio depends on it (it does).
- Inverse ETFs:
- ProShares UltraShort Oil & Gas (SCO): A must-have if tensions ease or a U.S. tariff on Iranian oil drags prices down.
- Currency Play:
- Short the Iranian rial (INR) as a speculative bet on Iran's economic collapse—but tread carefully; this is ultra-volatile.

4. The Clean Energy Contrarian Play**

Even in a supply crunch, the energy transition isn't stopping.
- Goldman Sachs Bloomberg Clean Energy ETF (GCLN): Targets companies enabling renewables and grid tech. It's a “buy and hold” for the post-Hormuz world.

When to Pull the Trigger—and When to Bail

Goldman's report is clear: markets aren't pricing in a 52% chance of Strait closure. That means time is on your side—but not for long.

• Buy these plays now, before the July OPEC meeting or any Hormuz-related kinetic event.
• Sell if:
• Tensions suddenly de-escalate (watch for diplomatic backchannel talks).
• Brent drops below $85—indicating oversupply or demand collapse.

Final Take: This Is a Geopolitical Tug-of-War—And You Can't Afford to Sit Out

The Strait of Hormuz isn't just about oil anymore. It's a proxy for global energy dominance, and the stakes are clear: $110 oil isn't a ceiling—it's a floor if things go south.

Investors who bet on infrastructure, hedge with inverses, and stay nimble on geopolitical signals will win. Those who ignore this? They're just hoping the gun doesn't fire.

The clock is ticking. Choose your side—and don't look back.