Only days before the strikes, the prevailing market view was that a direct confrontation involving Iran would be avoided and that the Strait of Hormuz would remain open because closure would damage all sides. That assumption has now been overtaken by events. Shipping through Hormuz, the artery for roughly 20 million barrels per day of crude and condensate, has been severely disrupted, vessels have been struck, and key Gulf energy infrastructure has come under pressure.
Yet oil remains below $80 per barrel. This reaction reflects a broader misunderstanding. The conflict underway is not a symbolic exchange; it carries existential implications for Iran’s leadership. In such circumstances, escalation becomes strategic rather than emotional. Recent strikes appear designed not as random retaliation, but as asymmetrical pressure, targeting radar systems, logistics corridors, refueling bases, and export infrastructure to increase operational and economic costs for adversaries.
Markets tend to move in stages: initial shock, followed by rationalization, and then realization. The present calm may represent the rationalization phase. However, physical risk to infrastructure across the Gulf, combined with disruption to a chokepoint that carries nearly a fifth of global oil supply, creates conditions for a more forceful repricing.
Deep backwardation already reflects tightening prompt supply. Should disruptions persist or widen, equity markets are likely to weaken and crude prices to accelerate sharply. This is unlikely to be a brief spike. It may mark the beginning of a structurally higher risk premium in energy markets.