Geopolitical Risk and Oil Prices - The market is fatigued by geopolitical risks, leading to a weaker price response than expected [2][3] - A major escalation, such as a strike on Iran's nuclear facilities, could spike oil prices by $15 per barrel [8] - A peaceful resolution could lead to a downside correction in prices due to increased supply from OPEC plus [9] - Potential disruptions to energy export targets, like the Kharg Island terminal, could significantly increase prices [10][11] US Oil Market Dynamics - The US consumes over 20 million barrels of oil per day, producing 135 million barrels and importing the rest [4] - Gasoline prices in the US are globally priced and will be affected, with no real insulation from global events [6] - Brent crude is a marker of global risk, while US prices are more localized, potentially widening the spread [5] Sanctions and Iranian Oil Exports - Iran's oil exports have increased from 500,000 barrels per day four years ago to over 15 million barrels per day two years ago, despite sanctions [12] - Sanctions are not static, and oil will find a market, even at a discount [13] - The Stop Harboring Iranian Petroleum Act (SHIP Act) aims to tighten sanctions on Iranian oil exports [14]