The Oil Price Spike That Didn’t Happen

What if they gave an oil price spike and nobody came? That is admittedly kind of a lame play on an old saying about parties, but it’s exactly what has happened over the two weeks since June 12, when Israel launched its initial assault on Iran.

At that day’s close of trading, the domestic U.S. WTI price sat at $68.04 per barrel. As of this writing on June 24, the price stands at $64.50. That’s not just the absence of a price spike, it is the opposite of one, a drop of 5% in just two weeks.

So, what happened? Why didn’t crude prices spike significantly? For such a seemingly complex trading market that is impacted daily by a broad variety of factors, the answer here is surprisingly simple, boiling down to just two key factors.