Oil Price Drops, Why?

 6/26/2026

Oil Drops, Why?

"A few hours ago, without prior notice or coordination with the Islamic Republic of Iran, certain authorities announced a new route for vessel traffic in the Strait of Hormuz," it said. It warned that "any violating vessels will be dealt with accordingly," without elaborating.

Iran struck a vessel in the Strait of Hormuz on Thursday, forcing a pause on evacuations of stranded seafarers and demonstrating its continued ability to restrict the critical waterway, despite the agreement reached last week with the United States.

A US official told CNN the vessel was attacked by an Iranian drone, but did not provide further details.

Yahoo News

This Friday morning West Texas Intermediate is trading at $68.68, down about $3 from yesterday. I began with the latest from Hormuz. It is hard to understand the continuing drop in the price of oil when Iran is literally attacking ships attempting to transit the Strait.

The administration has trotted out VP Vance to assure us that he has negotiated a great deal. Iran will get money, not from us, to cover their damages. And they do not get the money unless they ‘behave.’  I suspect Iran will spend the money as always and go right back to terrorist business as usual.

President Trump is angry that retail gasoline prices have not immediately declined. He seems to forget refiners must work through the $85+ oil accumulated during the fighting. Only then will they get to replace with now lower priced oil

Much has been written about the new FED Chair Kevin Marsh. Not much has been written about the actual bond market. Since early March the two-year Treasury note yield has climbed from 3.40 to 4.14%. This is a 22% increase in four months.  One inflation measure tops4%. It wil be difficult to convince a majority of governors a rate decrease is necessary.

A famous Wall Street adage is ‘after May go away.’  That describes where we are now.  The DOW briefly jumped above 52,50 yesterday only to quickly return to 52,000. The markets have been wild for semi-conductor chip makers of all kinds. The SOX index of those firms has soared since April from 8,00 to 13,300.  All the Magnificent Seven stocks are down in June.

Meanwhile back in the real world, here are two stocks to watch. Amazon is erasing its April to May rise. It has fallen from 280 to 232. Wal Mart has done that and more, gapping down in May. The fall is from 134 to 117. Both firms are reflective of the basic retail economy and both make scads of money. Why the decline?  Is the market seeing some buying weakness ahead?