Oil climbed above $82 because Washington and Tehran might not agree on keeping the Strait of Hormuz open. Traders call this news. The rest of us call it Tuesday.
The Strait of Hormuz has been a geopolitical chokepoint since before your grandfather lost money on his first commodities trade. Twenty percent of global oil supply flows through it. Iran threatens to close it every few years. America threatens to keep it open. Oil moves. Analysts pretend they predicted it.
Here's what actually happened. Oil was at $80. Then some diplomat said maybe we'll get a deal. Oil stayed at $80. Then another diplomat said maybe we won't. Oil hit $82. Forty-seven technical analysts filed reports explaining why their charts saw this coming. Thirty-nine of them had predicted the opposite last week.
Retail traders read the headline and bought crude futures because geopolitical risk sounds like something smart people consider. They will close those positions at a loss within six days. The Strait will remain open because it always does. Iran will keep threatening. America will keep responding. Oil will move based on inventory data that gets released every Wednesday at 10:30 AM.
But sure. Blame Hormuz.
The beauty of geopolitical oil analysis is that it's impossible to be wrong. If oil goes up, tensions escalated. If oil goes down, cooler heads prevailed. If oil goes nowhere, markets are waiting for clarity. You can build an entire career on this. People have.
The Strait of Hormuz is 21 miles wide at its narrowest point. That's wider than the gap between what oil traders think moves prices and what actually moves prices.
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