Brent crude closed Monday at $104.77, down $8.66—a decline of 7.63%. During Tuesday’s Asian session, however, it rebounded following reports of an attack, climbing to $105.25 and reaching as high as $106.61 at one point. The news that the U.S. had launched an attack on Iran’s Qeshm Island was confirmed by a report in The Wall Street Journal, citing U.S. officials; meanwhile, Iran’s official news agency, IRNA, reported multiple explosions on the island.

If you looked at your screen yesterday, you might have seen oil trading below $104; today, that same asset has surpassed $106. In a market that shifts direction this rapidly, searching for a "trend" is misleading. The core issue is that the price is caught between two opposing forces: the prospect of diplomacy pushes it downward, while military tension drives it upward. Yesterday, as talks mediated by Qatar showed promise, Brent fell 7.63% to $104.77, and WTI dipped below $97. Today, the flow of news has reversed. The volatility you are witnessing is not an anomaly; it is the very nature of how geopolitical risk premiums are priced.

"Why Is Qeshm Island So Critical?"

Qeshm is Iran’s largest island, located at the mouth of the Strait of Hormuz—right beside the primary gateway for oil shipments from the Persian Gulf. It houses an underground missile site, a naval base, and other significant facilities. According to reports citing U.S. officials, Washington has carried out limited strikes against targets on the island—an operation some officials have described as a "defensive" move intended to hinder Iran’s capacity to attack commercial vessels in the Strait of Hormuz. In other words, while the parties continue to engage at the negotiating table, low-intensity military maneuvers persist. The market’s primary fear is that one of these two channels—diplomacy or military restraint—might break down.

"Diplomacy or War? The Market Is Pricing In Both Simultaneously"

The most striking detail here is that while Trump suggests a "deal is possible," Tehran confirms that negotiations are ongoing—even indicating that a plan to reopen the Strait of Hormuz could begin within two days. Yet, at the same time, Iranian Parliament Speaker Ghalibaf signals to Washington that "the ball is in your court," prompting oil prices to climb by more than a dollar. This contradiction reveals that the market is pricing in two distinct scenarios at once: a resolution could cause the risk premium to evaporate, whereas a new military escalation could quickly bring the weekly peak—in the $108–$120 range—back into play. No one knows which outcome will unfold; managing these possibilities is a more realistic approach than attempting to make a definitive prediction.

"How Will This Situation Affect Your Pocketbook?"

Prior to the conflict, the Strait of Hormuz served as a vital artery through which approximately one-fifth of the world’s crude oil and natural gas shipments passed; since the outbreak of hostilities, however, vessel traffic through this corridor has dropped significantly. Consequently, any military development in the region directly impacts freight, insurance, and refining costs, creating a ripple effect that extends to fuel prices and the inflation outlook in energy-importing nations like Turkey. While yesterday’s 7.6% drop fueled expectations for a reduction in gasoline and diesel prices in Türkiye, today’s rebound casts doubt on the sustainability of those gains. In short, rather than rushing to "fill up the tank," it is more prudent to wait and see how the flow of news develops.

"Implications for Risky Assets and the Crypto Sector"

Oil serves as one of the most visible benchmarks for inflation expectations. If prices remain persistently high, central banks may adopt a more cautious stance regarding interest rate cuts—a shift that could increase short-term volatility for risky assets, such as stocks and cryptocurrencies. Analysts point out that a geopolitical risk premium is already largely priced in; therefore, news of attacks alone is unlikely to trigger a sustained rally unless there is concrete evidence of an actual disruption to physical supply. The same logic applies in reverse: for a sustained decline in prices, diplomacy must yield tangible results—specifically, the normalization of maritime traffic through the Strait of Hormuz.

"Today and Beyond: What Should Individual Investors Watch For?"

With midterm elections taking place in the United States today, the war—and its impact on high gasoline prices—has become a central issue for voters; this is, in part, the pressure driving calls for Trump to bring the conflict to an end. This suggests that, in the coming days, the direction of oil prices could be shaped not just by breaking news, but by political developments. Your watchlist is clear: look for concrete steps regarding Iran’s plan to reopen the Strait of Hormuz, updates from negotiations mediated by Qatar, and official statements from U.S. Central Command. The moving averages shown (MA5 ~112, MA10 ~108)—with the price currently oscillating within this range—indicate that the trend remains volatile. In an environment of such high uncertainty, hasty decisions often prove costly.

This content is for informational purposes only and does not constitute investment advice.
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