Prices for the benchmark Brent crude have settled near the $97 per barrel mark, and the market is frozen in anticipation. My latest calculations and flow analysis indicate that the current geopolitical premium is just the tip of the iceberg. The key scenario currently being worked through in investment circles assumes a move toward $120 per barrel, but it will only materialize under one condition: if Washington definitively abandons the diplomatic track in favor of military pressure on Tehran.
This is not just an abstract threat. The U.S. administration has already effectively walked away from the negotiation process, betting on military strikes, sanctions, and a naval blockade that has paralyzed Iranian exports and imports. The rhetoric is growing increasingly harsh: Iran's Supreme Leader Ali Khamenei has not appeared in public for six months, and the country is in a state of extreme tension.
Iran responds asymmetrically
Tehran is not going to sit idly by. Over the weekend, the head of Iran's Supreme National Security Council, Mohsen Rezaei, proposed a new strategy that includes blocking shipping in the Persian Gulf and the Gulf of Oman. This means expanding the restricted zone far beyond the Strait of Hormuz, directly threatening key energy supply routes. Notably, Iran and Oman have resumed negotiations on a corridor in Hormuz, which last month briefly cooled traders' enthusiasm, but whether Washington is ready to accept such an option is a big question.
Remarkably, this warning is not the first. As early as July, I was recording signals of a return to $120—long before the current surge. At that time, the market seemed calm, but fundamental factors were already beginning to work in favor of the "bulls."
Market on the brink of a deficit
On Monday, Brent rose to nearly $98 per barrel—its highest level since late July. The trigger was U.S. strikes on Iranian tankers, followed by an attack on Saudi Aramco facilities in Jizan. But it is not just about geopolitics. My data shows that oil inventories outside China have fallen by more than 400 million barrels since the start of the conflict. Commodity funds are already shifting to aggressive bullish bets, and reserves are approaching critically low levels. This is increasing pressure on Wall Street.
In the United States, the price of diesel has already hit an all-time high, and the gap with crude oil prices has exceeded $100 per barrel. For me, this is a clear marker of an impending deficit that will not resolve itself.
Analysts at the International Crisis Group believe that Tehran is betting on controlled escalation rather than a full-scale war. The goal is pressure on shipping, U.S. bases, and energy infrastructure. The main risk now is not the initial plan, but a miscalculation by one of the parties that could trigger an avalanche of events.
My opinion: The current situation reminds me of 2022, when the market underestimated risks until the very last moment. The $100 level is a psychological barrier, and breaking through it could trigger a cascade of short covering. For cryptocurrency investors, this is a double signal: rising oil will intensify inflationary pressure, which could delay the Fed's monetary policy easing and add volatility to risk assets, including bitcoin.