A move above $100 is possible, but it depends on whether the situation becomes a true supply disruption rather than only a geopolitical risk premium.
Bullish case (towards $95–$110):
1. Strait of Hormuz risk. Around 20% of global oil supply passes through the strait. Even partial disruption or tanker insurance spikes could remove several million barrels per day from the market.
2. Low spare capacity outside OPEC+. If Gulf exports slow, the market has limited short-term buffers.
3. War-risk hedging. Funds often buy crude futures aggressively during geopolitical shocks, amplifying the price spike.
Bearish case (pullback to $73–$75):
1. Strategic Petroleum Reserve (SPR) release by the U.S. to stabilise energy prices.
2. Demand elasticity. Above $90, demand destruction historically appears quickly.
3. Premium unwinding. If the Hormuz closure risk fades, the geopolitical premium can disappear rapidly, causing a “gap fill”.
My base case:
Short term: $85–$95 volatility likely.
Only a real supply interruption pushes crude above $100.
If tensions cool, the market could retrace toward $73–$75 as the war premium unwinds.
In other words, oil is currently trading more on geopolitics than fundamentals, which makes the move fragile and headline-driven.
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