The U.S. military denied Iran's claim that it struck two American vessels near the Strait of Hormuz. Iran said it happened. The Pentagon said it didn't. One of these countries is lying, which narrows it down to both of them.
Brent crude hit $100 a barrel on the news. Traders saw a headline with "Iran" and "struck" and "American vessels" and did what they always do when they can't locate the Strait of Hormuz on a map. They bought oil futures. They'll sell them tomorrow when a different headline scares them in the opposite direction.
The two sides traded attacks, which sounds dramatic until you remember this is the same strait where tankers get seized every other month and oil spikes for forty-eight hours before everyone forgets it happened. It's a recurring episode. Different season, same plot.
Some guy in Ohio just put his entire Roth IRA into energy stocks because he read "retaliation" and "Strait of Hormuz" in the same sentence. He doesn't know what either word means. He'll find out when he checks his account next week and discovers the headline cycle moved on to some Fed official coughing during a press conference.
Iran says it struck vessels. The U.S. says it didn't. Oil traders don't care who's right. They care that the headline exists. And because it exists, they'll trade it. They'll move billions of dollars based on a claim one government made and another government denied, then they'll act surprised when the chart looks exactly the same six months from now.
The attacks happened or they didn't. Either way, crude's back at $100. That's the only part of this story retail traders will remember, right up until the moment they forget it completely and lose money on the next headline that sounds just like this one.
Photo by Amin Zand Miralvand on Unsplash
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