The US Iran conflict appears to be winding down. That said, there are still several unknowns in regard to how the Strait of Hormuz will operate in the future. And it is also unclear how quickly the situation will return to normal, how much demand destruction has taken place, when the strategic petroleum reserves will cease being used to supply additional crude, and so forth. In short, there are too many unknowns to provide any meaningful commentary.
There are very smart, knowledgeable people on both sides of the bearish bullish debate. Until there is more clarity, I am just going to sit on the sidelines. I hope that within a month or so, the situation becomes much clearer.
I further hope there is more stability in the Gulf so that people in the Gulf can get one with their lives and people around the world can have more predictable and affordable energy.
This post is a carbon copy of last month’s post. Also, I realized at the end of June that I had not posted at the end of May. So I am backdating this post to the end of May. At that time, I had no opinions for the month of June.
Because of the ongoing conflict in Iran, I will not offer an oil price forecast for this month. There is so much misinformation and disinformation circulating—from all sides and even well-respected sources—that it is impossible to form a clear view of developments.
Like many others, I have been following events as best I can. West Texas Intermediate prices have stayed elevated amid the disruptions, reflecting uncertainty around supply routes such as the Strait of Hormuz. I continue to sit on my hands with no new positions until the situation clarifies. No one knows how long this will last—it could be days, weeks, or longer.
I hope that the conflict winds down soon with minimal harm and that the Iranian people are able to lead better lives.
Because of the ongoing conflict in Iran, I will not offer an oil price forecast for this month. There is so much misinformation and disinformation circulating—from all sides and even well-respected sources—that it is impossible to form a clear view of developments.
Like many others, I have been following events as best I can. West Texas Intermediate prices have stayed elevated amid the disruptions, reflecting uncertainty around supply routes such as the Strait of Hormuz. I continue to sit on my hands with no new positions until the situation clarifies. No one knows how long this will last—it could be days, weeks, or longer.
I hope that the conflict winds down soon with minimal harm and that the Iranian people are able to lead better lives.
Because of the ongoing conflict in Iran, I will not offer an oil price forecast for this month. There is so much misinformation and disinformation issued by all sides—and even by well-respected sources—that it is impossible to have a clear view of what is taking place.
That said, I hope that Iran’s threatening capabilities are soon neutralized and that Iranians are able to enjoy much better lives than they did in the past, with more freedom and liberty.
Like a lot of people, I have been trying to keep up with the developments as best I can. On March 23, The Economist had an interesting and informative interview with Sir Alex Younger, former head of Britain’s MI6 foreign intelligence service. A ten-minute segment early in the interview was released to the public on YouTube. I hope you find it interesting.
With the US threatening Iran with military force, and as long as the situation remains tense and uncertain, for February I expect West Texas Intermediate oil prices to range between $60 to $70 per barrel. If the situation is resolved peacefully, then I expect oil prices to drop into the mid- to high $50s or low $60s. If the situation becomes kinetic, then all bets are off.
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Of course, the only item currently known that really matters for February 2026 is whether the US decides to launch military action against Iran. I am hoping that the two sides can reach an agreement without the use of force. My expectation, however, is that the US will take some type of action against Iran.
Those were my thoughts at the end of January. Events have since taken a dramatic turn.
Overnight into Saturday, February 28, I learned that Israel and the United States had launched coordinated strikes against Iran. Because the situation has become kinetic, all bets are off. That means it is impossible to know what to expect regarding West Texas Intermediate oil prices in the days and weeks ahead—other than that WTI should trade higher than Friday’s close of about $67. How much higher depends on how the conflict unfolds.
I currently hold some short WTI put options with strike prices well below Friday’s close; these expire this Friday, March 6. Once they expire, my plan is to sit on my hands and take no new positions until the conflict ends. No one knows how long that will take—it might be days or weeks.
Traders everywhere are waiting for the all-clear signal to short oil. So as the conflict winds down, many expect a sharp reversal. Commodities often overshoot on both the upside and downside. Do not be surprised, therefore, if WTI drops to the mid-$50s—or even lower—once the war ceases and shorts pile in.
Energy Aspect’s Amrita Sen and Jeff Currie provided an interesting and helpful discussion in “Jeff Currie – The ‘global oversupply myth’ and return of the old economy | EA Forum Ep. 15.” The “global oversupply myth” seems to be losing some traction. Currie appears quite bullish, discussing the possibility of oil hitting $250. That price seems too high to me. Even so, it is always good to consider viewpoints different from your own. No one has a crystal ball.
Wrapping up, because of the war with Iran, all bets are off. I do not have a price forecast for the period ahead. Instead, I am waiting for the conflict to end before reassessing the WTI oil price environment.
I hope the war is brief with a minimum of harm. And equally, I hope the Iranian people gain their freedom and are able to fully participate in the global community.
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