Terry
Private Fund Portfolio Manager & Trader
Crude oil regains a geopolitical premium after the US revoked its Iran oil-sale waiver on July 7, putting Iranian supply back under sanctions after July 17. Supply can't normalize fast: Hormuz is only partly open, Gulf facilities are damaged and OPEC output has fallen, while US summer driving supports demand. Oil's price center may rise from about $67 a barrel in 2025 to above $70. Goldman's cut to $75 Brent for 2027 and weak 2026 demand remain risks. x.com
Crude oil's supply shortage this year is now Wall Street consensus, and no one dares say demand weakness will outweigh the gap. The Strait of Hormuz blockade has lasted three months, far beyond most institutions' forecasts; Iran holds the upper hand in talks and the US will not concede on core issues, making it an endurance contest. Trump remains the strongest hand on oil, and an economic crisis is the biggest black swan, though likely already priced in. x.com
Crude oil at $70 prices in far too much optimism and should see $80 before $60. The IRGC knows Trump wants a deal and has little appetite to restart the war, which makes further escalation easy to underestimate. If the Strait of Hormuz is not fully reopened within weeks to a month, the market will realize the disruption is not temporary, and any Iranian transit fees on Hormuz shipping would likely be passed on to buyers. US VP Vance says violence will be met with violence. x.com
An imminent Israeli strike on Iran puts Gulf oil infrastructure at unusually high risk over the next three months, supporting a near-term rise in crude oil. Large trades are betting on oil reaching $115 again. x.com
Crude oil should fall back into the $60s and likely well below over time once the Iran war is resolved. Middle East producers are overproducing but cannot export the barrels, so when the Strait fully reopens they will flood the market. Oil tried to break down from its trend line but was rejected, and bigger resolution news is likely needed to push it much lower. Cheaper oil would remove current inflation fears, setting up a deflationary boom. x.com x.com
A possible US strike on Iran poses near-term upside risk for crude oil. If Trump expects to lose the midterms, he may act between Israel's October 27 election and the November 3 US vote. Crude has filled the $101 gap and reached the rising channel's midpoint; if it keeps breaking higher, the next levels are $105, $110 and the channel top near $115. x.com
Oil is surging toward $100 as the Hormuz standoff deepens: US crude is near $95 a barrel, up 41% since July 2, and could top $100 by Friday unless something changes. Per CENTCOM, US forces destroyed an Iranian tanker in the Gulf of Oman after attempted IRGC attacks on a US warship, while Trump says there will be no negotiations. Higher oil would make inflation much worse just ahead of the FOMC. x.com x.com
Crude oil's price floor is well below $70 a barrel now that Iran is under control and Venezuela is pumping oil. x.com
Oil traders anticipate a resumption of the Iran war after the midterm elections, favoring more upside for crude oil. After a bullish reversal off its 10-week moving average, the odds favor a continuation of the rally to the $110-120 range. x.com
Crude oil has a renewed risk premium now that the US-Iran ceasefire has collapsed. Three commercial ships were attacked in the Strait of Hormuz, the US blamed Iran and struck back two days in a row, and President Trump said the ceasefire is over. The Treasury also pulled its waiver on Iranian oil sales from July 17, and Brent spiked as much as 7% toward $80. Each past crack in the ceasefire spiked oil and eventually calmed down, but nobody knows which time it won't. x.com
Sustained high energy prices strain US farming, logistics, manufacturing and consumers, so crude oil should fall dramatically from its elevated level. Middle East and Russia tensions are lifting WTI, shown near $103, while Trump will likely step in at some point to reduce uncertainty. x.com x.com
Fears of US strikes on Iran could send crude oil to $200 quickly. FinanceLancelot reports that the USS Theodore Roosevelt is heading to the Middle East and says the move has revived concern that Trump will follow through on threats to hit Iran after the midterm elections. x.com
