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Oil has climbed more than 7% this week as tanker traffic through the Strait of Hormuz slowed following Iranian attacks that drew the United States into renewed fighting for control of the waterway.
The case for higher prices rests on a credible fear: if exports through the strait plunge, global supply faces a gap investors believe cannot be quickly absorbed. The problem is that plunge hasn't happened yet.
The rally and what it is pricing Seven percent in a single week is a large move for crude, and it is priced on worry rather than confirmed supply loss.
Investors are betting that active U.S.-Iran military engagement at the strait will push tanker operators to pull back from the waterway. It is not the same as a position backed by export data showing a halt in shipments.
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