Oil prices skyrocketed overnight. With the supply disruption characterized as one of the most devastating in history, analysts were bracing for prices to soar as high as $150 a barrel, which was Brent's peak during the financial crisis. Some even said the crude market was at the "point of no return."
But, four months later, those worst-case scenarios have yet to be realized. In fact, the oil price spike has largely been erased, with Brent and West Texas Intermediate crude having tumbled back to their pre-war levels as optimism grows for an official peace deal with the US and Iran, though the conflict is still technically ongoing.
Brent crude, the international benchmark, has cratered 42% from its $126-a-barrel peak earlier this year. West Texas Intermediate crude, meanwhile, is down 37% from its wartime peak of around $109.
The market appeared to take supply shocks stemming from the Iran war less seriously over time, largely due to optimism that the war would end soon. Leading up to the US's and Iran's MOU, President Donald Trump had repeatedly teased an end to the conflict, a move that invoked references to the TACO trade, the idea in markets that the Trump Always Chickens Out and will step back to boost stock prices when needed.
