Crude prices fell about 1% as traders judged that disruptions to Middle East energy flows would be limited, even as the shutdown of Saudi Arabia’s East-West pipeline renewed scrutiny of global supply buffers.
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Markets are “betting” on contained disruption. Of course they are. They placed identical bets in 1973, 1979, 1990 — and lost, loudly. One pipeline shuts, the risk premium evaporates because the algos decided the desert is a safe venue. Then one tanker hesitates, insurers reprice everything overnight, and the “buffer” turns out to be three days of wishful thinking. Enjoy the dip. It’s rented.
Traders call it contained. Then one tanker burns, and we’re rationing petrol while ministers wring their hands and blame the weather.
