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Hedge fund manager and notable commodity trader Paul Tudor Jones says oil is set to take another leg higher because of the U.S.-Iran conflict.
"I am long oil... bullish oil...I think it can rally another $20 or $25 bucks," said Tudor Jones, founder and chief investment officer of Tudor Investment, on CNBC's "Squawk Box." "If something to ameliorate the situation was going to happen, it would have happened already before the midterms."
A rally of that size in U.S. oil prices from current levels would send them above their previous closing high for 2026 of just under $113 per barrel. Western Texas Intermediate crude futures were trading at around $92.50 Tuesday morning.
Tudor Jones said if the rally were to happen, the equity market would "absolutely totally hate it," though equities were able to relatively manage higher oil prices earlier in the year. The S&P 500 only fell just over 7% at its trough in late March after the start of the U.S.-Iran war on Feb. 28, which was lower than analysts estimated would happen based off of oil's surge.
Paul Tudor Jones, founder and chief investment officer of Tudor Investment, speaks with CNBC's Squawk Box on Oct. 13th, 2026.
CNBC
U.S. oil prices jumped in March after the start of the war, and hit their peak in early April. Prices then fell in June, falling below $70 per barrel that month. However, they started rising again in July, as the conflict in the Middle East heated up again and the status of the Strait of Hormuz — a critical passageway for oil — remained unclear.
Prices hit a recent high of almost $106 per barrel in September, though have traded off those levels since.
Oil prices are just one headwind that Tudor Jones thinks the equity market needs to handle at the moment. He said 2027 in particular may be difficult for the stock market as investors digest increased equity supply from megacap tech IPOs, like that of Anthropic and OpenAI.
While Tudor Jones thinks it's too late before the U.S. midterm elections for a resolution to the conflict, he believes that President Donald Trump will seek to seek peace after voters cast their ballots.
"I assume the president has a plan post-election," he said. "I assume he has a plan because, clearly, what's going on is untenable. It's not sustainable, I don't think, in the long-run."