Oil Market Turbulence as Iran Conflict Continues
The oil market has been experiencing significant turbulence since the start of the Iran conflict. The price of oil has fluctuated wildly, with Brent rising above $100 on four occasions and reaching a high of $118 in late April before dropping to $72 in early July.
The global market processes information through speculation, as investors buy or sell oil based on their expectations of future prices. This allows businesses that use oil to lock in future prices and provides some cushion against conflict escalation.
The supply side of the market is influenced by factors such as hydraulic fracturing and horizontal drilling, which have increased access to huge quantities of oil. However, climate change catastrophism and government policies aimed at reducing oil use have reduced supply and increased prices.