Elementary, My Dear Watson, Oil Prices Surge as US Enters Iranian Fray!

The Game is Afoot: A Volatile Start

The world awakens to find itself embroiled in a most elementary yet perplexing predicament. Oil futures that sensitive barometer of global unrest have leaped a staggering 3% following the rather bold one might even say audacious move by the United States to engage directly with Iran. As I always say 'It has long been an axiom of mine that the little things are infinitely the most important.' And in this case the little thing is a barrel of crude now commanding a considerably higher price.

Trump's Gambit: A Surprise Attack

President Trump never one to shy away from the dramatic surprised the markets by launching attacks on Iranian nuclear sites. Fordo Natanz and Isfahan find themselves at the center of this new chapter in the ongoing saga. As I’ve often noted 'There is nothing more deceptive than an obvious fact.' And the obvious fact here is that this action throws the already turbulent Middle East into further disarray.

Iran's Response: All Options on the Table

The Iranian Foreign Minister not to be outdone in the game of brinkmanship has declared that the Islamic Republic reserves “all options” to defend its sovereignty. A threat veiled in diplomatic language but a threat nonetheless. One can almost hear the faint echo of Moriarty's sinister laughter in the background. 'The game is on,' indeed but who is truly playing whom?

The Strait of Hormuz: A Choke Point of Global Significance

Ah the Strait of Hormuz! A narrow waterway yet a critical artery for the world’s oil supply. Secretary of State Rubio has warned Iran against any attempts to close this vital passage. Closing it would be as he so eloquently puts it 'economic suicide'. Quite right! Twenty percent of global oil consumption flows through this strait. Closing it would be like shooting oneself in the foot with a blunderbuss. Utterly disastrous and quite frankly rather unintelligent.

China's Role: A Diplomatic Chess Move

Rubio has shrewdly called upon China to use its influence to prevent Tehran from closing the strait. A clever move considering China's heavy dependence on the Strait for its oil imports. 'Data! Data! Data!' I can almost hear myself exclaim. One cannot make bricks without clay and one cannot navigate geopolitical waters without reliable data. China's reaction to this request will be most telling. It is a chess move on a global scale.

Saudi Arabia's Concerns: A Nervous Neighbor

Even Saudi Arabia that long standing ally of the United States is watching developments with 'deep concern'. The Kingdom has limited its involvement but the memories of the 2019 attacks on its oil facilities are undoubtedly fresh in their minds. The International Energy Agency stands ready with its 1.2 billion barrels of emergency stocks a safety net in these uncertain times. As I always say 'When you have eliminated the impossible whatever remains however improbable must be the truth.' And the truth is we are in for a rather bumpy ride.