Trump Weighs Military Action In Iran: Crude Rallies As Geopolitical Risk Returns To World's Busiest Oil Route - United States Oil Fund (ARCA:USO)

Group 1: Energy Market Dynamics - Crude oil prices have been increasing, with WTI March futures rising 1.47% over the past week to $59.17 per barrel, and natural gas February futures up 2.30% to $3.242 per MMBtu [1] - The Strait of Hormuz is a critical chokepoint for global energy, with approximately one-third of global seaborne oil shipments and 19% of natural gas passing through it [2] - An average of 20 million barrels per day flowed through the Strait of Hormuz in 2024, highlighting the region's significance to global energy security [3] Group 2: Potential Supply Disruptions - Goldman Sachs analysts warned that Brent crude oil could spike to $110 per barrel if the Strait of Hormuz were to be disrupted, emphasizing strong economic incentives for the U.S. and China to prevent such disruptions [4] - Despite a projected surplus of 3.84 million barrels per day in 2026, this may not be sufficient to offset the impact of significant supply shocks from disruptions in the Strait of Hormuz [5] Group 3: U.S. Political Context - President Trump indicated that the U.S. would support Iranians amid protests, suggesting potential military action could occur before negotiations, which may impact geopolitical stability in the region [7]