On Saturday, Steve Yetiv did yeoman's work in debunking the threat of an oil shock if the United States or Israel were to strike Iran in the Washington Post. As is always the case in matters of geopolitics and oil, analysis is something of a mirror game. Yetiv rightly explains the reasons why an Iran strike would be of limited impact on supply. And he's right that with little impact on supply, price should be stable. But the same could be said for conditions today and, although price has been falling over recent days, fear--largely unfounded fear--and naked gambling (speculation) have pushed prices well over that justified by demand.
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