Oil Prices Drop Following U.S. Strikes on Iran

Brent crude prices declined significantly on Monday, dropping from a recent high of $114 to as low as $104. The price slump followed reports that the Federal government of the United States conducted strikes on Iranian targets, alongside rumors that the U.S. and Iran have entered renewed negotiations for a settlement.

Market analysts reacted to the volatility with differing views on valuation. Robin Brooks of the Brookings Institution argued that the fair value of Brent is approximately $87, suggesting that current market prices include an exaggerated risk premium.

Jeff Currie, CEO of Real Macro, advised investors to book short-term profits on spot prices and refined products. While Currie maintains that a structural supercycle will keep energy prices elevated over the long term, he suggested shifting investments toward oil infrastructure and logistics. He noted that further escalation in the Strait of Hormuz would be mutually destructive for all parties involved.