Iran, Israel, Bombs, and Oil: Why It Was Always Going to Be a Nothingburger
I got a lot of texts this weekend asking: What’s this going to do to oil?
Short answer? Nothing.
Despite the drama—headlines blaring about B-2 bombers over Iran, ceasefire violations, and speculation of full-scale war—the fundamentals didn’t change. Israel deliberately avoided hitting Iran’s oil export infrastructure. That was the tell. That was always the tell. If they weren’t going to hit oil day one, they weren’t going to hit it at all.
And without a disruption to exports—without knocking out the one economic artery that keeps Iran functional—this wasn’t going to move markets long-term. It was strategic signaling. Military targets. No oil, no civilian centers, no economic collapse.
Meanwhile, oil is still structurally bearish. U.S. producers are in PR mode—talking up “Drill, baby, drill” while actually slowing down. Capex is flat to declining. Rig counts are down. Shareholders want returns, not growth.
So we’re left with this: tension in the Middle East, no supply impact, and U.S. production that’s quietly rolling over. Oil shrugged. Natural gas might pop this summer on power issues and heat-driven demand, but oil? Same story, different day.
Yeah, it’s painful holding long oil while the Magnificent 7 levitate this market near all-time highs. But physics is still a thing. So is economics. Supply is tightening, capital is retreating, and demand isn’t going anywhere. You can’t print barrels. It’s not if this rebalances—it’s when. And when it does, it’s going to move fast.
Until then? Patience. Conviction. And a strong stomach.
I seriously doubt their ability to block the Strait. Houthi/Hezbollah/Hamas are decimated. If they use their own Navy for a blockade, it would take about length of an extra inning baseball game for US/Israeli,EU forces to sink every vessel they brought forward. And that doesn’t even account for China getting involved after their economics interests are MOST harmed by a blockade. Any such blockage would be short-lived and lead to the end of the Iranian regime. They’re not THAT stupid!
Iran won’t mess with blockading the strait or hijack any ships - they’d lose their navy and only have weasly ground forces left. That’s a totally defenseless position.