Trump's Election Calculus Caps Oil Price Fears

The recent conflict between the US and Iran has led to a moderate increase in oil prices, but it is significantly weaker than the surge seen at the start of the war.

Brent crude rose about 24% since the US-Iran fighting resumed on July 8, compared with a 43% surge during the first three weeks of the war.

The rally has been driven by a higher geopolitical risk premium, but several factors are preventing a repeat of the sharp rally seen at the start of the conflict.

Record volumes of crude held at sea following the reopening of the Strait of Hormuz in June, together with China's large crude inventories, have provided the market with a significant short-term buffer.