Eurasia Group's Greg Brew: The conflict in Iran is being fought in the oil market

• The US-Iran conflict is characterized as a standoff, with Iran using proxies and actions like the Saudi pipeline attack to exert pressure without full-scale war.
• Oil prices (WTI, Brent) are rising, with physical Brent prices noted between $120-$150.
• National average diesel prices have surged to $6.23/gallon (up from $3.69 last year) and are expected to continue rising due to a relative shortage of refining capacity for middle distillates and higher demand from agriculture and industry.
• Gasoline prices are also expected to tick up, albeit more slowly than diesel.

The discussion centers on escalating geopolitical tensions between the US and Iran, particularly concerning the Strait of Hormuz and the recent attack on a Saudi pipeline. These tensions, coupled with refining capacity shortages and increased demand, are driving significant increases in oil and product prices, especially diesel, with potential for continued upward trajectory.