It isn't over until it is over
Risks to the oil price and global economy appear likely to stay contained.
Middle East conflicts matter to markets and the global economy because they can impact the oil price.
Further, history suggests that the oil price needs to double before it can inflict a recession in the west.
Deutsche’s researchers list 32 political events since 1939 that led to selloffs. They took a median of 16 trading days to hit bottom, and 17 days thereafter to recover all lost ground.
Small wonder that traders look at any geopolitical dip as a chance to buy.
Are the risks really so low?
There are also arguments that the most alarming possibilities wouldn’t hurt that much.
If Iran were to close the Strait of Hormuz,
Neil Crosby of Sparta Commodities points out that Western naval action to reopen it would be swift.
It’s a move that Iran can only make once, and that would annoy everyone in the world, not just Israel and the US. China, for example, would badly want to avoid a closure, and will presumably have told this to Iran.
A similar argument might restrain Israel from attacking Iran’s oil production; its allies would not be happy about the consequences.
Israel has the upper hand, but if it drives Iran to desperate responses...
John Authers Bloomberg 17 June 2025
Marknaden rycker på axlarna
https://englundmacro.blogspot.com/2025/06/stupror.html
Kommentarer