The oil market is sending a puzzling message: despite fresh missile attacks on commercial vessels in the Strait of Hormuz, one of the world’s most crucial energy chokepoints, crude prices stubbornly hover around $73 a barrel; far below the $90 mark many analysts might expect given the risks.
Nigel Green, CEO of the deVere Group, a global financial advisory giant, warns that this complacency could leave investors dangerously exposed. The ongoing geopolitical volatility in the Persian Gulf, he argues, is severely underpriced, with markets behaving as if the threat to global energy supplies is negligible.
The Strait of Hormuz, a narrow waterway between Oman and Iran, sees roughly one-fifth of the world’s oil consumption pass through it daily. Any disruption here sends shockwaves through global energy markets, triggering price spikes and inflationary pressures worldwide. Yet despite Iranian missile strikes on commercial shipping vessels in recent months, oil prices have not reflected the scale of potential supply risks. According to Green, this disconnect stems from market participants focusing on the flow of oil that continues unabated rather than on the growing operational and geopolitical threats that could rapidly escalate.
Since early 2026, the region has been a tinderbox. Iranian forces declared the Strait “closed” in March, carrying out attacks on ships and increasing military posturing. This led to a near-total halt of shipping traffic for weeks, sending Brent crude prices surging past $120 per barrel. However, a fragile ceasefire brokered between the U.S. and Iran, along with ongoing diplomatic talks, has allowed some shipping flow to resume, tempering the immediate price impact. Yet, this fragile calm is deceptive. The risk of sudden escalation remains high, especially as Iran continues to target commercial vessels and U.S. military sites in the region, keeping the threat ever-present.
Market participants appear to be betting heavily on diplomacy and containment, despite the absence of a durable peace framework. Green cautions that relying on hope in such a volatile environment is a precarious strategy. Historical precedents show that geopolitical crises around the Strait can flare unpredictably, with rapid shifts that catch markets off guard. The biggest price moves in oil often happen not when a disruption is expected, but when sentiment suddenly turns on a dime, forcing traders to scramble to reprice risk.
More than just political speeches or military threats, Green advises investors to track real-world indicators that signal tightening supply conditions. Tanker movements, export volumes, freight rates, insurance premiums, and refinery activity provide tangible data on how the crisis is impacting the flow of energy. These factors often precede price jumps and can offer early warnings of a looming supply crunch. Currently, while tanker traffic has not been completely halted, increased insurance costs and operational delays are quietly squeezing the supply chain.
Adding complexity to this landscape is the background of weak global oil demand. After a surge in prices in early 2026, concerns over slowing economic growth and demand have pushed prices down to multi-month lows. This subdued demand backdrop masks the underlying supply risks posed by Hormuz tensions. Green underscores that it doesn’t require a full closure of the strait to send prices spiking. Even sustained increases in risk premiums, shipping delays, or insurance costs can tighten supplies enough to push crude significantly higher.
The market’s apparent comfort with current prices near $73 per barrel contrasts sharply with the reality on the ground. The deVere CEO points out that this pricing implies the probability of a major disruption is almost negligible; a stance he finds increasingly difficult to defend. While he stops short of forecasting an immediate jump to $90, Green argues that the risk premium embedded in prices today falls short of what the escalating conflict and operational challenges warrant.
Iran’s missile strikes and threats in the Strait have historical echoes. Past incidents, such as the 2019 tanker attacks and the broader Middle East conflicts, have shown how quickly oil markets can react when supply routes face threats. The 2026 crisis has already led to a systemic energy shock, with LNG supplies from Qatar and the UAE also disrupted, compounding market vulnerabilities. The reopening of the Strait has eased some pressures, but experts warn that the market could take months to normalize fully, and any renewed flare-up could quickly reverse gains.
Financial markets are watching closely as the U.S. and Iran engage in a delicate dance of strikes and ceasefire attempts. U.S. airstrikes targeting Iranian missile and drone storage facilities in June 2026 followed Iranian attacks on shipping and military sites, underscoring the tenuous nature of peace in the region. Each exchange highlights the risks of an unintended escalation that could severely disrupt energy exports through the Strait, with immediate global economic consequences.
Analysts and investors face a challenging balancing act. The oil market is caught between the realities of geopolitical risk and the fundamentals of supply and demand. Many forecasts for 2026 predict oil prices averaging in the $60–$80 range, reflecting oversupply fears and demand weakness. Yet these projections often come with caveats about the wild card of geopolitical upheaval. Should the Strait of Hormuz become impassable again or operational risks spike sharply, the market’s complacency could give way to a rapid repricing of oil, inflationary shocks, and disrupted global supply chains.
In this context, Nigel Green’s warnings resonate as a call for caution. He urges investors not to be lulled into a false sense of security by the current price levels or by diplomatic overtures that may not hold. Instead, they should prepare for a range of outcomes, including sudden spikes in oil prices that reflect the real and present danger to one of the world’s most vital energy arteries. For markets and governments alike, the Strait of Hormuz remains a geopolitical fault line whose tremors ripple far beyond the Persian Gulf.
The markets may not yet have priced in the full risk of the Strait of Hormuz crisis, but the stakes could not be higher. As the world watches the delicate balance of power in the Middle East, the oil price, a barometer of global economic health, could still be jolted by the next missile strike or political misstep. The question is not if, but when, the market will wake up to the true cost of this strategic chokepoint’s instability. Until then, $90 a barrel remains a looming possibility, waiting in the wings of an increasingly volatile geopolitical drama.