Middle East Conflict Rocks Oil Markets as TACO Index Predicts Trump's Next Move

The ongoing conflict in the Middle East has triggered significant volatility in crude oil prices. The situation is complex, with two opposing forces at play.

On one hand, a 'second front' has been opened in Yemen, where Houthi militants have launched missile attacks on Saudi Arabia's southern city of Jizan. This threatens the supply chains and shipping through the Strait of Hormuz, a critical chokepoint for about one-fifth of global crude oil transport.

As a result, Brent crude oil prices surged by 27% over the past two weeks, reaching $96.78 per barrel. However, this upward trend was short-lived as news broke out that Pakistan is mediating US-Iran negotiations, causing Brent crude to plummet by 5% in a single day.

The 'TACO (Trump Always Chickens Out) Index', developed by Signum, predicts a highly probable chance of Trump de-escalating policies when market pressure reaches an extreme. Analysts predict this turning point may occur as early as July 26, leading to a deep pullback in oil prices.