U.S. and Iran are really fighting, yet oil prices won’t budge? Has the market gone mad—or are we?

Missiles are flying, tankers are exploding, and oil prices… lying flat?

On June 27 Beijing time, the 60-day U.S.-Iran ceasefire agreement officially became a worthless sheet of paper.

The Panamanian-flagged tanker M/T Kiku was pounded by a drone in the Strait of Hormuz. Without wasting a moment, U.S. Central Command struck southern Iran hard for the second straight day—exploding missile depots and drone facilities, all of them.

The Iranian Revolutionary Guard Corps is no pushover either. They turned around and launched retaliatory strikes against U.S. military bases in Qatar, Kuwait, the UAE, and Bahrain. Bahrain’s Ministry of Foreign Affairs has already acknowledged: We were attacked.

Then IRGC issued a statement: Next, they may take “stronger measures” against vessels in the Strait of Hormuz.

Trump went straight in with a nuclear-level threat: “If military operations are completed, Iran will no longer exist.”

The Strait of Hormuz—the choke point for 20% of global oil supply—was put on the fire again.

According to the script of decades past, when something like this happens, oil prices should rocket immediately, and Brent should break $100 in minutes.

But guess what?

Oil prices, almost, didn’t move.

Is the market going crazy?

No, the market isn’t going crazy. The market has already learned “selective fear.”

Remember the end of May? The chairman of the Iranian parliament’s committee said one line—“permanently controlling Hormuz”—and oil prices surged 1.4% that day. The market was scared out of its wits.

A month later, missiles really flew, tankers really blew up, and U.S. bases really got hit—but oil prices acted as if nothing happened.

Why?

Because the first time it was called “unexpected,” and the second time it was called “expected.”

The market has already put a price tag on Middle East risk. Everyone has become desensitized to the idea that “something will happen to Hormuz.”

And don’t forget—Iran’s crude oil exports have been quietly falling for the past few months. From 1.7 million barrels per day at the May peak, by June they had already dropped to below 1.2 million barrels per day. Before the ceasefire even broke down, the market had already been pricing in “an early disappearance” of Iranian supply.

By the time it actually happens, oil prices can’t rise even when they should.

That’s called “buy the expectation, sell the fact.”

But there’s an even tougher thing keeping oil prices pinned to the ground:

Rate hike expectations.

Just the other day, Morgan Stanley warned: If the unemployment rate falls below 4%, the Federal Reserve would be forced to raise rates. Kashkari directly said there could be a hike once more before the end of the year.

Think about it—

War → oil prices rise → inflation rises → the Federal Reserve is even less willing to cut rates, and might even raise them → the U.S. dollar strengthens → crude oil priced in U.S. dollars is, in turn, held down.

See it?

Geopolitics pushes oil prices up, while macro tightening pushes them down. Two forces are tugging at each other.

Who’s winning right now? Macro. Because the market fears “no money” more.

“War is short-term pain, rate hikes are long-term pain. The market isn’t afraid of short-term pain; it’s afraid of long-term pain.”

A tanker exploding—that’s today’s news.

The Federal Reserve raising rates—that’s the nightmare for the next 6 to 12 months.

Markets always price the “future,” not “today.”

When everyone realizes this conflict can’t be resolved in the short term, but also won’t immediately drag the whole world into recession—then they’ll put it on hold and instead trade the more certain macro narrative.

That’s why oil prices aren’t moving.

What does this mean for crypto?

Two sentences:

First, the inflation narrative is still there. Geopolitical conflict hasn’t made oil prices run out of control; if anything, it has made expectations of “inflation peaking” even more blurred. That’s not good news for risk assets.

Second, it also shows that—people in the market are no longer that naive bunch who rush in whenever they hear news about war. Everyone is waiting for a clearer signal: Will the Federal Reserve raise rates, and if so, by how much?

So at this stage, don’t expect “a war premium” to prop up a BTC rebound.

What truly determines direction is macro—it's the Federal Reserve—that damned unemployment data.

“Geopolitics determines the reasons for volatility; macro policy determines the direction of volatility.”

No matter how loud the missiles fly, they can’t drown out a single statement from the Federal Reserve. #0成本拿2股SK海力士 #美光市值超越Meta跻身全美前十 #美国5月PCE通胀升至4.1%创三年新高 $BTC $BZ $CL