This is a conflict that started more than three weeks ago, and was meant to destroy Iran’s nuclear capabilities, eliminate its missile threats, and pre-empt an imminent attack. Now it is a war aimed at preventing oil prices from rising further. If you have a sense of déjà vu, it is because you have read Winston Churchill’s witty paraprosdokians, one of which reads: “Shoot first and call whatever you hit the target.”
It is odd how Donald Trump found time to visit Graceland yesterday amid the carnage he created. Maybe he really does think he is the new King of rock ‘n’ roll. For the rest of us we are stuck in the mud and await the next bout of conflict, which is not where warcraft might land, but the completely different words and announcements regarding a ceasefire in the Middle East.
Probably even for oil industry veterans, last week’s events and developments exceeded the definition of “unprecedented.” Geopolitical upheavals or wars around oil-producing regions or major energy hubs have always precipitated wild swings. Yet observing May/June WTI dropping more than a dollar in less than three hours last Wednesday, or the May WTI/Brent arbitrage collapsing by over $10/bbl in less than a day—only to rally by $8/bbl in the ensuing six hours—is beyond what can be explained away by anxiety or fear.
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