I sat down with Yahoo Finance this week to discuss if the Israel-Iran conflict really means anything important for the oil markets.
History has shown that Middle Eastern conflicts rarely disrupt global oil supply and I don’t believe this one will be an exception. Iran’s threats to close the Strait of Hormuz feel empty when the U.S. has made it clear before that it won’t tolerate blocked shipments. Even with ships rerouting slightly, I don’t expect sustained price spikes.
The market’s biggest uncertainty isn’t Iran or Israel. The real wild card here, as it still remains, is the United States. Oil traders are betting this conflict stays contained, but Trump’s next move could change that calculus overnight. We know global oil demand could peak by 2030 with China slowing faster than expected. Meanwhile, the Senate’s new budget is rolling back solar incentives which would only mean a messier energy transition for the next several years.
The bottom line here is that oil’s recent rally is more about short-term jitters than long-term shifts. What we really need to watch out for is policy wildcards, and long-term demand decay.
