Iran-Israel-US Conflict: How Wars Drive Global Crude Oil Price Volatility

• The Iran-Israel-US conflict has put global oil markets on edge, causing Brent crude prices to swing sharply.
• The Strait of Hormuz, a critical maritime corridor for 20% of global oil and LNG, is central to current volatility, with threats of disruption.
• Markets are forward-looking; geopolitical risk premiums, even without actual supply cuts, significantly impact prices based on expected escalation.
• Chokepoints like the Strait of Hormuz are crucial; threats to these routes tighten supply and raise costs, even if production continues elsewhere.
• Despite potential for higher prices, buffers like reduced reliance on Middle Eastern oil and strategic reserves have prevented a sharper surge, though these could erode.