Oil markets saw extreme volatility after crude briefly surged above $100 per barrel during the Iran conflict.
âą Geopolitical tensions pushed Brent crude close to $115â$120 as traders priced in supply disruption risks.
âą The biggest concern was the Strait of Hormuz, through which nearly 20% of global oil supply moves daily.
âą War risk premiums added $5â$10 per barrel within days.
However, prices reversed quickly when de-escalation signals appeared.
âą Oil dropped back toward the $90â$95 range as fears of long-term supply disruption eased.
âą Traders began removing the âwar premiumâ from energy markets.
âą 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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