Crude Oil: 81! The sound of gunfire never stops, and the rally keeps going.

WTI had a big bullish candle yesterday. It’s now back around 75, with a 5% gain intraday. But what truly lit the market was yet another blast at the Strait of Hormuz.

Yesterday, the U.S. military struck more than 80 targets in Iran. Iran retaliated by attacking 85 U.S. military outposts in Bahrain and Kuwait. Even worse, the U.S. Treasury directly revoked the temporary exemption for Iran’s oil exports—both pillars of the 60-day peace agreement signed last month (restoring navigation in exchange for lifting sanctions) collapsed at the same time. WTI surged nearly 6% on the news.

This rally has nothing to do with fundamentals—it’s purely the gunfire pushing oil prices higher. One-fifth of global oil trade has to pass through the Strait of Hormuz. With this throat tightly squeezed, who dares to say supply is stable?

“Ceasefire agreement? Paper-thin. The peace premium vanished overnight.”
“81 isn’t the finish line—it’s the starting point. Each time the strait hears another explosion, oil prices get another notch of premium.”

Next, keep an eye on 83. As long as the shelling doesn’t stop, the script isn’t over.
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