After oil prices “rose for three consecutive days and then stabilized,” what is not stabilizing is the fundamentals, but rather the pricing of the war premium temporarily cooling off. Brent has risen cumulatively by more than 8% over three days, back around $95; WTI is also holding above $90, and the two have since gone sideways. This year, oil prices have already gained nearly 60%. Why the sudden surge? It’s not because supply and demand suddenly tightened; rather, the market is pricing in the possibility of “the Strait of Hormuz being cut off.” After U.S. forces carried out airstrikes on Iran, Iran retaliated with missiles and drones against U.S. bases in the Middle East. The Strait of Hormuz handles about one-fifth of the world’s seaborne oil shipments; before the war, it averaged about 20 million barrels per day. The premium comes due before any actual supply disruption—insurance costs, shipowners’ risk-avoidance, and rerouting expenses all rise in advance. Why has it stabilized again? Because supply data has not worsened: on Tuesday, the U.S. escorted 40 merchant vessels, with roughly 18 million barrels of crude passing through the strait, and it repeatedly emphasized that traffic remains steady. Trump also said the airstrikes “won’t last too long,” so the momentum for expanding the premium has temporarily waned. But stabilization does not mean a pullback: Saudi Arabia’s exports last month fell to at least a nine-year low, and war damage and risk have already lifted the floor under oil prices. What will determine oil prices next is not news headlines, but three things: whether Iran will retaliate again and whether Israel gets involved; the actual throughput of the Strait of Hormuz and tanker freight insurance premiums; and after oil prices feed into inflation, how the Federal Reserve will decide at its September 16 meeting. Oil is now the master switch for global assets—when it doesn’t move much, it’s hard for interest rates, the stock market, and even crypto markets to find a truly clear direction. #After three days of crude oil gains, prices stabilize