Over the summer, amid escalation after escalation in the Strait of Hormuz, the market stubbornly refused to price a geopolitical risk premium into crude.
Persistent supply concerns (e.g., Venezuela and Iran) and all manner of maritime drama were seen as wholly insufficient to offset potential demand destruction tied to the worsening global growth outlook.
As it turns out, the market was wrong. Over the weekend, we got an escalation meaningful enough to overwhelm any and all growth jitters, catalyzing the largest ever (in dollar terms) intraday spike in Brent, which exploded nearly 20% higher when