Big Take There’s War in the Middle East. Why Are Oil Prices Falling?
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Jun 23, 2025 
Javier Blas, a seasoned Bloomberg Opinion columnist with 25 years in oil markets, discusses the surprising trend of declining oil prices amid Middle Eastern conflicts. He reveals how the U.S. has emerged as the world's largest oil producer, reshaping market dynamics. The conversation dives into Iran's influence on global prices and challenges assumptions about the Strait of Hormuz's strategic importance. Blas analyzes the complex interplay between geopolitical tensions and oil supply, shedding light on new economic realities.
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US Dominance Dampens Oil Price Shocks
- The U.S. has become the dominant oil producer, making global oil prices less sensitive to Middle East conflicts.
- Oil prices can fall even in response to war-related incidents due to reduced reliance on Middle Eastern supply.
Shale Revolution Reduces Market Fear
- The U.S. shale revolution reduced global dependence on oil through the Strait of Hormuz.
- This geographical and production shift lowers market fear of supply disruptions from Middle East conflicts.
OPEC's Strategy Against Shale Shifts
- OPEC attempted to undercut U.S. shale oil by lowering prices from 2014 to 2016.
- Saudi Arabia now increases production to regain market share lost to shale producers.