Oil Bears Are Dangerously Underestimating Geopolitical Risk

For decades, oil prices could swing wildly on even the distant prospect of war in the Middle East. With U.S. shale, that changed, leading many to assume that anything short of an oil blockade in the Strait of Hormuz will leave oil markets cold—and such a blockade is highly unlikely. This, however, is a false sense of security. Geopolitics can still flip the script on oil bears. The most recent oil price rally was prompted by the threat of a military escalation between the United States and Iran. Interestingly, the oil blockade that the United...