Market Volatility Around Oil Prices Appears Deliberate
The Brent crude price chart per barrel has been volatile in recent times. The dollar price per barrel recently hit $100, but then fell due to claims by US President Donald Trump that there was a deal with Iran at hand. However, this claim proved to be nonsense.
A top Iranian national security official, Mohammad Bagher Zolghadr, issued a statement laying out multiple requirements for reopening the Strait of Hormuz. These included lifting the US naval blockade and sanctions on Iran, withdrawing US military from around Iran, paying war reparations, releasing frozen Iranian assets, and ending attacks on Iran's allies in the region.
The US has not agreed to these terms, nor does any deal with Oman include them. The reality is that the Strait of Hormuz is likely to remain closed for now, despite claims by both parties that it will reopen soon.
Late last week, fewer than 10 vessels a day passed through the Strait of Hormuz, compared to an average of around 130 ships a day before the conflict. The market is pretending that this figure will be restored, but this is nothing more than an illusion created to suggest that economic foreboding is unnecessary.
However, the longer the game of 'will they, won't they' continues, the harder the crash will be. We will bear the cost of this folly.