Fears Of An Iran Oil Shock Are Overblown

Oil prices are up more than 30 percent from six months ago amid fears that Israel or the United States may strike Iran. Concerns have spread that military conflict would cause a major shock to oil prices, damaging the U.S. and global economies. While the situation is serious, such predictions are unlikely to pan out. Understanding how such fears are exaggerated would clarify the stakes in the standoff and underscore how scholars, market analysts and oil traders often overestimate the effect geopolitical events will have on prices.