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No. 2 - Global Conflict Trade

Trading Global Conflict as Iran's Aggressive Actions Send Oil to High For Year

America’s strained relations with Iran roiled the oil market, today. Not only is Tehran going forward with a nuclear program – today the government interrogated 15 British servicemen detained on Friday. By the end of trading, the tension was palpable, and had sent oil up to nearly $63. Forget supply and demand...this is cat and mouse. What's the smart trade as Iran wreaks havoc with the market?

Dylan Ratigan reads an e-mail from a viewer who asks what should investors look for when choosing a refiner in the near term driving season.

Eric Bolling says Tesoro (TSO) and Marathon (MRO) were down today based on President Bush talking about ethanol. Eric sees the dip as a buying opportunity for these stocks.

Eric adds that if a conflict breaks out with Iran and the military closes the Straight of Hormuz, Saudi Arabia will have a hard time exporting oil and the price will jump $10 a barrel.

Dylan Ratigan says this has happened before and calls the current war of words - saber rattling. He asks what makes this conflict different than any other.

Tim Strazzini says what’s different is we’re at war with Iraq.

The guys argue a bit with Eric saying the US has moved an aircraft carrier into the region and things are heating up. Dylan shoots back – that’s fear mongering.

Eric Bolling says the trade is Oil Service HLDRS ETF (OIH) and he recommends owning it or owning the companies in the OIH.

Guy Adami says Valero (VLO) is his pick, because they have a plant in Lima Ohio and they received 10 bids on it, Friday.

Dylan adds that the Energy Select SPDR ETF (XLE) fund flows shows an underweight of energy stocks.

Eric adds the (XLE) is all integrated oil companies, something he doesn’t like. Instead, he recommends investors play the United States Oil Fund (USO) – because it’s more diversified.

Questions? Comments? fastmoney@cnbc.com

Trader disclosure:
On MAR 26, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders. Strazzini Owns (MER) Bolling Owns (BP), (XOM), Gold, Silver, Soybeans, is Short Corn