When Iran, the seventh largest producer of Petroleum of the world, decided to launch drones and missiles against Israel, on the 13th, the indicators of global economic insecurity sounded loud. In addition to all the humanitarian drama of the war involving Palestinians and Israelis, its economic effects became even more widespread with the new movement.
It drew attention, however, that, in the days following the attack, the graphs showed oil prices falling. During the week, Brent oil prices fell by more than 3%, staying around US$87 on Friday (19).
Under normal conditions of temperature and pressure, when a large producer embarks on an armed conflict, the supply of its product tends to decrease. And, as the manuals say, reduced supply leads to higher prices.
The reaction so different from Cartesian logic in the case of oil is explained by the clown Tiririca’s catchphrase, when he was elected federal deputy in 2010: “It won’t get any worse than it is.”
Let me explain: It is worth remembering that the financial market moves based on expectations. In this case, Iran’s role in the Middle East war had long been taken for granted. And in the first week of April, when Israel bombed Iran’s embassy in Syria, the price of oil rose more than 4% on the prospect of retaliation.
So, when the Iranian offensive was actually carried out, it became easier to see the real consequences of the escalation of the conflict. For market experts, it was clear that the flow of oil will not be as impacted as imagined at the beginning of the month.
The move even made analysts at Goldman Sachs increase the expected price for oil at the end of the year. Still, for them, the barrel will end 2024 trading at US$86 — below the current level.
What may seem like a certain “relief” in relation to the price of oil does not reflect tranquility in the global economic scenario. Commodity pricing is closely linked to production and circulation perspectives. This is very different from assets such as shares and currencies, whose prices are more linked to the interests of large investors and the flow of money.
The rise in temperature in the Middle East, the ongoing war in Ukraine and uncertainties about the United States economy —especially in a presidential election year— have led major global investors to disagree with the clown/deputy Tiririca’s catchphrase in the context of the market. financial.
The best example of this is gold, whose price reached its historic peak this week. Considered a safe haven against crises, the metal only sees significant increases when the big players are afraid of what the future holds. Looking at the giants’ reaction to the last week, it’s best to buckle up and prepare for more turbulence.
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