oilmarketalert

Many people are talking about oil rising to $120 per barrel and saying there is a huge shortage. But let’s break down what is really happening.
1️⃣ Fundamental Price
The strait supplying about 20% of global oil is one of the key routes for world energy supply.
Logically, if 20% of supply disappears, the price should increase by roughly 20%.
Before the conflict, oil was around $65 per barrel.
If we add a 20% shortage:
$65 × 1.2 ≈ $78–80
So the real fundamental price should be around $75–80 per barrel.
2️⃣ Why the Price Went to $120
Everything above ~$80 is largely market speculation.
Reasons include:
⚡ Panic trading
📊 Futures market dynamics
🤖 Algorithmic trading
🌍 Geopolitical headlines
There is no physical shortage that justifies $120 oil.
The market is simply being pushed higher by speculation and risk pricing.
3️⃣ The Russia Factor
Russia has been under heavy sanctions since 2022, for almost four years.
Now that some restrictions have been temporarily eased, Russian oil can re-enter global markets more freely.
The interesting part:
Fundamental value: $65–75 per barrel
Actual selling price: $90–100 per barrel
That difference creates huge extra profits.
Example:
If Russia exports about 5 million barrels per day, then over 3 months the extra profit from the price difference alone can reach around:
💰 $13.5 billion
This means that losses from years of sanctions could potentially be partially recovered within just a few months, thanks to the current speculative price premium.
4️⃣ Possible Market Reaction
If hostilities in the Middle East officially come to an end, the geopolitical risk premium in oil could disappear quickly.
📉 In that case, oil prices could drop sharply.
📈 At the same time, risk assets like crypto could move higher.
Because of that, current prices for coins like Solana, Ethereum, and XRP may potentially be close to a market bottom — or at least near a strong accumulation zone.
5️⃣ Conclusion
From an economic perspective:
📉 The fundamental oil price is around $75
📈 Prices near $120 are mostly speculation and geopolitical risk premium
For traders this means markets are currently driven more by psychology and speculation than by real supply shortages.
Understanding this difference can help traders make more rational decisions.
⚠️ Disclaimer:
This post is for educational and informational purposes only and does not constitute financial or investment advice. Cryptocurrency and commodity markets are highly volatile. Always DYOR (Do Your Own Research) before making investment decisions.
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#OilMarketAlert #MacroAnalysis #Solana #XRP #Geopolitics