Oil, the Strait of Hormuz and the Global Energy Equation: When Geopolitics Manipulates Markets

I have been following the energy market for 9 years, and one thing I have learned: oil prices are never just numbers on a screen. They are a mirror reflecting every geopolitical tension, every economic calculation, and every fear of the market. This week, that mirror is shattering piece by piece at the Strait of Hormuz – where 20% of global crude oil passes through every day. The US airstrike on Iranian naval vessels last Saturday is not just a single military event. It is a signal – a signal that speculators and hedge funds have reacted to immediately. Brent crude surged to $92.18 per barrel, the highest level since last August. WTI also touched $88.12. But what concerns me is not the numbers, but the question: is this the beginning of a full-scale energy crisis, or just a short wave before the market finds its equilibrium again? Let us look at the bigger picture. OPEC+ has just decided to increase production by 411,000 barrels per day in May – a negligible figure compared to actual demand. Meanwhile, oil tankers are beginning to divert away from Hormuz, the world's most important shipping route. Iran threatens to completely close this strait if attacked further. This is no longer just about the Middle East – this is a global equation. I once wrote about the collapse of prediction models when they fail to account for geopolitical variables. I was wrong about school football data, and that was the most accurate finding ever – but with oil, I have learned that purely economic models always fail before political reality. We are witnessing a grand experiment: can the market self-correct when one of its main arteries is threatened? The reaction of major consuming countries is also noteworthy. China and India – the two largest crude importers in Asia – have begun increasing their strategic reserves. This creates a spiral: the more they worry about supply, the more they buy, which pushes prices even higher. This is the self-amplifying mechanism I call 'data skewing' – where the behavior of market participants becomes new data, distorting all initial forecasts. It is not OPEC+ that is controlling the market; they are merely reacting to a reality they cannot control. This organization lost its absolute dominance in 2026, when US shale oil production boomed. Now, the US is both the largest producer and the largest destabilizer – a paradox that no economic model anticipated. Looking at historical data, I see a repeating pattern. Each Hormuz crisis – 2026, 2026, 2026, 2026 – created short-term price spikes, but the market always found a new equilibrium. The question is whether this time is different. With Iran possessing more advanced anti-ship missiles and the US facing multiple fronts simultaneously, the risk of escalation is real. What scenario are hedge funds betting on? CFTC data shows that net long positions of funds on Brent crude have increased by 23% over the past week. They do not believe in a quick diplomatic solution. And when the most informed players in the market act this way, I tend to listen. Transfers are not mathematics, but mathematics explains why people go mad – and this also applies to oil. The madness of the energy market does not come from numbers, but from herd psychology when facing uncertainty. We are in a phase where any information, no matter how small, can cause major fluctuations. I believe in data, but I believe even more in the mistakes that data cannot measure. And the biggest mistake the market is making is believing that this crisis will end quickly. History shows that Middle East conflicts rarely have clear endings. We may be at the beginning of a prolonged cycle of volatility. For Vietnamese consumers, this has direct implications. Domestic fuel prices, which are adjusted according to world prices, could increase by another 5-7% in the next adjustment period. Inflation will face pressure, and the State Bank may have to reconsider its monetary easing path. This is a ripple effect that few see when focusing only on price fluctuations in the international market. Esports and football: two arenas, one crowd learning to applaud – but with oil, the crowd is learning to fear. The difference is: in sports, you can predict outcomes based on historical data; in geopolitics, historical data is almost useless because each crisis has its own unique characteristics that cannot be compared. I was wrong to think that the oil market could be modeled as a closed system. It is an open system, affected by countless political, social, and military variables that no algorithm can fully capture. This is the biggest lesson I have drawn from 9 years of tracking this market. My conclusion may disappoint many: we are entering a prolonged period of volatility, where political decisions in Tehran, Washington, or Riyadh will have far greater impact than any economic decision. Investors need to prepare for a scenario where oil prices remain above $90 per barrel for many months, bringing global inflationary pressure. The final question I want to raise: is the world ready for a prolonged energy crisis, or are we still convincing ourselves that everything will be fine? History does not side with optimists when facing Middle East conflicts. And this time, I lean toward the possibility that things will get worse before they get better.