Oil Prices Spike First, Stabilize Later During Conflict: Equirus Securities

• Equirus Securities notes oil markets overreact to geopolitical conflict, with prices surging disproportionately before retreating.
• History shows oil prices jump 25-300% during crises, even with temporary supply losses, as seen in the 1973 Arab oil embargo and Iranian Revolution.
• The Gulf War and Russian invasion of Ukraine also saw initial price spikes, followed by stabilization as supply chains adapted.
• Equirus highlights that the challenge is predicting how long the disruption and risk premium will persist, not the initial spike.
• Renewed Iran tensions could lead to a 9-15% oil price hike if output is lost, or a larger surge to $95-110 if Hormuz shipping is threatened.