Tensions in the Middle East once guaranteed a spike in oil prices — but not anymore. After Iran’s missile attack on a US airbase in Qatar, global oil markets shrugged. Prices actually fell, defying old market instincts.
A New Oil Power: The US
According to Bloomberg’s Javier Blas, the major shift comes from America’s rise as the world’s largest oil producer. Thanks to the shale revolution, the US now produces over 21 million barrels per day, up from 7.5 million two decades ago.
“This is the first major Middle East crisis of the post-US shale revolution era,” said Blas. “And the market is no longer as sensitive to Middle East disruptions.”
Markets No Longer React on Fear Alone
Previously, even a threat to supply — especially through the vital Strait of Hormuz, which carries 20% of global oil — triggered massive price hikes. Now, unless there’s actual supply disruption, markets remain stable.
Shale Oil: America’s Cushion
The shale boom has also made US presidents less cautious. Unlike in past administrations, today’s White House isn’t paralyzed by oil inflation fears. With oil holding around $75 a barrel, there’s economic breathing room.
Even Donald Trump’s “Drill, Baby, Drill” call comes from this comfort zone. Experts agree: $75 oil is the sweet spot — profitable for shale producers, but not punishing for consumers.
Strait of Hormuz Still a Risk, But Unlikely
While Iran could shut the Strait, doing so would hurt its own economy and alienate key allies like China. It’s more a diplomatic threat than a practical strategy, analysts say.
Real Threat? Attacks on Oil Fields
Blas warns that missile strikes on Saudi oil fields — like the 2019 Houthi attack — could cause serious disruptions. These fields lie within Iran’s missile range and represent a far more devastating scenario than closing the Strait.
What It Means for the Future
While oil production is up for now, shale is not unlimited. If demand stays high and shale peaks, the US could return to import dependency — though likely never to the levels seen 20 years ago.