Crude Oil Breaks $90, and the Market Starts Trading “Inflation Returning”

The escalation of the military conflict between Iran and the US continues. The impact has moved beyond the geopolitical level and is gradually spreading to global energy and financial markets.

As of July 20, Brent crude briefly reclaimed the $90 per barrel mark, hitting a high in more than a month. US WTI crude also rose to around $84. What is really making the market nervous is not only that both sides keep striking at each other, but that the navigation risk in the Strait of Hormuz is increasing. This route accounts for about one-fifth of global oil transportation. If tanker passage faces further disruption, what the market is trading won’t be just a “risk premium,” but a real supply shortfall.

Another phenomenon mentioned in the image is also worth paying attention to: after the war escalated, gold did not keep surging as many people had imagined.

On July 20, spot gold pulled back to around $4,005 per ounce. The reason is that although rising oil prices strengthened safe-haven demand, they also pushed inflation expectations higher again. The market started to worry that the Federal Reserve may need to keep high interest rates for longer, and it also can’t rule out another rate hike. A stronger US dollar and US Treasury yields put clear pressure on gold, which does not generate interest.

This shows that the market’s core contradiction has changed.

In the past, escalation of conflicts usually meant buying gold and selling risk assets. But now, when crude oil rises, what the market thinks of first is inflation. If energy prices remain at high levels for the long term, the Federal Reserve’s policy room will narrow again. Liquidity pressure could hit US stocks, gold, and even the crypto market.

For the crypto market in the near term, what truly needs attention isn’t only whether Bitcoin can play the role of “digital gold,” but also whether oil prices keep breaking out, whether the US dollar keeps strengthening, and whether market expectations for the Fed’s rate hikes will further heat up.

Geopolitical conflict is the spark, and energy-driven inflation could be the main thread that affects global asset pricing. #夏日创作营 #美军结束对伊朗新一轮打击 @Gate 广场