Oil markets saw extreme volatility after crude briefly surged above $100 per barrel during the Iran conflict.
⢠Geopolitical tensions pushed Brent crude close to $115â$120 as traders priced in supply disruption risks.
⢠The biggest concern was the Strait of Hormuz, through which nearly 20% of global oil supply moves daily.
⢠War risk premiums added $5â$10 per barrel within days.
However, prices reversed quickly when de-escalation signals appeared.
⢠Oil dropped back toward the $90â$95 range as fears of long-term supply disruption eased.
⢠Traders began removing the âwar premiumâ from energy markets.
⢠Volatility remains high as every geopolitical update shifts expectations.
Market Impact
Energy stocks surged during the spike.
Inflation fears briefly increased.
Safe-haven demand boosted the US Dollar Index and gold during peak tensions.
Key takeaway:
Oilâs move above $100 was driven mainly by geopolitical risk rather than supply fundamentals, which is why the rally reversed quickly once tensions cooled.
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