Sailing Through The Tides

Oil prices have once again begun swinging wildly, caught in the crossfire of intensifying geopolitical tensions—particularly in the Middle East.

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The recent escalation between Israel and Iran raised fears of potential disruptions in the Strait of Hormuz, a vital passage through which nearly 20% of global oil flows. Though no physical supply lines have been severed, prices spiked rapidly in June, breaching the $80/barrel mark before dipping again as the situation temporarily cooled.

What's becoming increasingly clear is that modern oil markets react as much to the threat of disruption as they do to actual physical shortages. A delicate equilibrium now persists: major suppliers such as OPEC+ and the United States are doing just enough to stabilize prices, even as global demand softens due to slowing economic activity in China and broader concerns of a global slowdown. However, despite these moderating factors, any fresh spark in the region—be it a blockade, missile strike, or naval skirmish—could send prices soaring once more.