Oil Prices Dropping - Iran's Efforts Are Floundering

News and opinion reporting is a tricky business. Sometimes we are called upon to read the minds of people who don't know what they themselves think on a given topic; sometimes we are called upon to read the minds of people who don't think at all.

At other times, we are called upon to prognosticate on what an event, like, say, Israel and the United States attacking Iran, may have on another matter, like oil prices. Only yesterday, Sunday, I noted that Iran's efforts to close the Straits of Hormuz might cause a spike in oil prices.

Sometimes it's lovely to be wrong. At least, so far.

On Sunday, I predicted:

The Strait of Hormuz sees about a fifth of the world's oil production pass through that strategic chokepoint. Earlier on Sunday, my RedState colleague Mike Miller informed us of Iran's threat to close the Strait. Whether they can do that remains to be seen, but even the threat could affect oil prices in the short term.

As of this writing, late morning Monday (Alaska time), oil prices have dropped.

Oil is DOWN by 7.5 percent.

Iran is cooked.
— Katie Pavlich (@KatiePavlich) June 23, 2025

A quick look at RealClearMarkets' commodities pricing bears that out; again, as of this writing, RCM shows US Oil down 7.3 percent, with Brent (UK) crude down 7.22 percent. That's not an insignificant drop. In fact, oil prices now are lower than when President Trump resumed office, Iran or no Iran.

🚨WOW — Oil prices down 7.5%! pic.twitter.com/mHbkNCf1py
— Townhall.com (@townhallcom) June 23, 2025

In this clip, market guru Brian Brenberg said:

Remember, we've been talking about the threat of Iran maybe going after the Strait of Hormuz. As oil ticks down, what it's telling you is the folks who monetarily have the biggest stake in the game in oil, are saying "We don't think Iran's gonna do that, in any meaningful way." Stock investors are saying, all the risks of inflation that we are baking in, that were maybe causing markets to go down, that's draining out of the system. This is really... these numbers tell you that the people who make it a professional endeavor to assess risk in the world, are saying, "At this moment, risk in the Middle East is diminishing, because of what Israel has accomplished, because of what the United States and this president has accomplished, and what it's meant to Iran. Clearly, Iran has gotten a signal that it has not gotten in a very long time.

Commodities markets are essentially predictors of future risk. Today's prices in fungible commodities like petroleum are based on the investors' best estimate of tomorrow's supply, and as prices are dropping, we have a pretty good indicator that people who do this for a living, people who are successful in reading these tea leaves, are not at the moment too worried about tomorrow's supply.

President Trump's promise to "drill, baby, drill" is doubtless a part of that. But it's very likely Iran, most specifically the regimes' habit of its mouth writing checks its butt can't cash, may also be a factor. In fact, today, it may be the larger factor.

Earlier on Sunday, my colleague Mike Miller reported on Iran's intention to try to close the Strait of Hormuz.

Iran has made some efforts, mostly the jamming of navigation systems, but the Strait isn't closed yet. Today's trend in crude futures tends to make us think that the markets, at least, aren't too worried about it.

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