The oil spike everyone feared never showed up
The oil spike everyone feared never showed up.
Forecasting is mostly a way of buying peace of mind. You want a number for the worst case so you can decide how frightened to be, and once you have that number, you quietly stop thinking and start bracing for it.
That instinct is not irrational. It is how you decide whether to refinance, whether to take the job across town, whether the August road trip is still on.
Then late February arrived, and the worst case got a number.
When the United States and Israel struck Iran on Feb. 28, Tehran shut the Strait of Hormuz, the narrow channel that carries roughly a fifth of the world's oil and refined products. The forecasts that followed were not subtle. Trading desks talked about crude at $150 a barrel. Some of them talked about $200.
You ran that math in your head. Most drivers did. One tank, times 52 weeks, times two cars in the driveway.
Five months later, that number still has not shown up. Brent crude futures peaked around $126 a barrel, comfortably below the 2008 record of $147, and averaged roughly $101 between the start of the war and June 11, before briefly retreating to prewar levels near $70 in early July, according to Reuters .
The distance between that forecast and your actual receipt is one of the most underrated personal finance stories of the year. It is also worth real money to you.
Start with what a closed Hormuz is supposed to mean. About 20% of the world's oil and refined products move through it, and before the war, 100 to 130 ships passed through the waterway daily, according to AAA . Traffic has been a fraction of that for most of the year.
That is the textbook definition of a supply shock. The textbook says prices go vertical and stay there.
They did not. West Texas Intermediate, the U.S. benchmark, has swung between roughly $68 and nearly $113 since the fighting began, AAA reported. It sat near $85 on Tuesday, July 21.
At the pump, the damage was real but bounded. Here is the shape of it.
Feb. 28 : This is the day the strikes began: the national average for regular gas was $2.98 a gallon, according to AAA .
May 21: The national average peaked at $4.56, its high for 2026, AAA reported.
Early July: Brent briefly retreated to prewar levels near $70 a barrel, Reuters reported.
July 20: The national average climbed back above $4 for the first time since June 17, AAA said.
July 21: WTI traded near $85, roughly $18 higher than a year earlier, according to AAA .
The mechanics are not mysterious, and none of the five reasons involve luck, according to Reuters . They involve a market that had far more slack in it than the models assumed.
China was the surprise. The world's largest oil importer cut crude purchases to their lowest in nearly a decade by June, curbed fuel exports and shifted drivers toward electric taxis, the wire service reported.
