What Happened?

A number of stocks jumped in the afternoon session after the U.S. launched a new wave of military strikes against Iranian targets, as President Donald Trump announced a 20% U.S. toll on cargo transiting the Strait of Hormuz. 

After Iran declared the Strait of Hormuz closed "until further notice" over the weekend, President Trump stated the U.S. will reimpose a blockade on Iranian ports and act as the waterway's "guardian." To fund this security, the U.S. will immediately begin charging a 20% fee on all cargo shipped through the strait. The escalation reverses a recent decline in oil prices that followed OPEC+'s decision to raise production, reinserting geopolitical risk into the energy market. 

The Strait of Hormuz normally carries about a fifth of global crude and liquefied natural gas supplies. While the physical flow of oil has not been fully halted, the threat of a prolonged disruption directly lifts the revenue outlook for U.S. domestic producers and international majors by raising the baseline price of their reserves. Exploration and production companies with high leverage to crude prices saw steeper gains than diversified majors, reflecting their direct exposure to spot prices. However, the rally's durability depends on whether actual supply is curtailed; if the strait remains navigable, the geopolitical premium could quickly recede.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• U.S. Shale E&P company HighPeak Energy (NASDAQ: HPK) jumped 4.4%. Is now the time to buy HighPeak Energy? Access our full analysis report here, it’s free.
• Mixed or Offshore Upstream E&P company Green Plains (NASDAQ: GPRE) jumped 4.1%. Is now the time to buy Green Plains? Access our full analysis report here, it’s free.
• Mixed or Offshore Upstream E&P company Gevo (NASDAQ: GEVO) jumped 4.5%. Is now the time to buy Gevo? Access our full analysis report here, it’s free.

Zooming In On Gevo (GEVO)

Gevo’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 21 days ago when the stock dropped 7.8% on the news that the U.S. Treasury formally issued a 60-day general license authorizing the production and sale of Iranian crude oil, extending a de-escalation trade that began when Washington and Tehran signed an interim peace framework the previous week. 

Energy markets were not just reacting to new Iranian barrels entering supply, they were pricing out a war. The U.S. and Israel launched strikes on Iran on February 28, 2026, triggering the largest disruption to global energy supply since the 1970s. Iran closed the Strait of Hormuz, which normally handles roughly 20% of the world's oil and LNG, pushing Brent from approximately $73 pre-war to $126 at its peak. The 14-point memorandum of understanding signed the previous week commits Iran to reopening the strait and allowing IAEA inspectors to return. The Treasury general license, announced by Secretary Scott Bessent as part of that peace framework, is the formal implementation step clearing Iranian barrels to flow legally through August 21. Each confirmed step in the diplomatic process removes another layer of the roughly $50-per-barrel war premium still embedded in crude. 

However, the read-through carries meaningful caveats that the original draft overlooked. Iran re-announced the closure of the Strait of Hormuz over the weekend, citing Israeli strikes in Lebanon as ceasefire violations, even as maritime data from Windward and Lloyd's List showed tankers continuing to transit. JD Vance arrived in Switzerland on Sunday and mediators cited "encouraging progress," but the final deal was not signed. The IEA also warned that if the framework held fully, 2027 global supply could outstrip demand by 5.05 million barrels per day, a structural headwind for energy equities extending well beyond the session's move.

Gevo is down 26% since the beginning of the year, and at $1.53 per share, it is trading 45% below its 52-week high of $2.78 from March 2026. Investors who bought $1,000 worth of Gevo’s shares 5 years ago would now be looking at only $244.00.

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