The world held its breath. When it was confirmed that the United States had bombed Iranian territory over the weekend, many expected oil prices to soar and the conflict to spread like wildfire across the region. But neither of those things happened.

One of the biggest surprises was the muted reaction of the oil market. Prices didn’t spike; in fact, they barely moved. Crude markets remained remarkably calm. What’s going on?

The most immediate explanation is technical: the Strait of Hormuz, through which roughly 20% of the world’s oil supply flows, was not blocked. Satellite images show that tankers are still navigating the narrow waterway without major disruption. That seemingly cold fact has a huge impact: as long as the oil keeps flowing, the market sees no reason to panic.

“Satellite images suggest that oil continues to circulate,” noted Ipek Ozkardeskaya, an analyst at Swissquote Bank, when explaining the market’s “muted reaction.”

But there are deeper reasons behind the stability in oil prices — and many of them point directly to one player: the United States, the new heavyweight in global oil.

The Rise of a New Oil Power

Over the past two decades, the United States has gone from being a major importer of oil to a dominant exporter. The fracking revolution — a technique known as hydraulic fracturing that allows oil to be extracted from shale formations — changed the rules of the game. Today, the U.S. is the world’s largest oil producer, with the capacity to influence global prices directly.

This energy self-sufficiency gives the U.S. a strategic advantage: it can engage in military operations in the Middle East without automatically triggering a supply crisis. More importantly, it can tap into its vast strategic reserves to stabilize prices if needed.

As Saxo Bank analyst Ole Hansen explained, any potential spike in oil prices would likely be softened by “the release of strategic reserves, especially in the United States and China,” two of the world’s largest holders of emergency stockpiles.

Calm — But for How Long?

Iran has repeatedly threatened to close the Strait of Hormuz in the past, but such a move has never materialized. And it seems unlikely to happen now. Blocking the strait would be, in the words of U.S. Secretary of State Marco Rubio, “an economic suicide.” Iran needs to keep selling oil to sustain its economy, and its top customers — particularly China — rely on that supply.

Analysts widely agree that Tehran might choose more symbolic retaliation or limited strikes on Western shipping, but a full blockade is improbable. The Strait of Hormuz remains one of the most heavily monitored waterways in the world, particularly by the U.S. Navy, making a long-term disruption unlikely.

A Numb Market

Another key reason behind the market’s apparent indifference is that the risk was already priced in. Since the war between Iran and Israel broke out in June, oil prices had been climbing, incorporating a “risk premium” of at least $10 per barrel, according to UBS analyst Giovanni Staunovo.

In other words, markets were already expecting some form of escalation, which is why they didn’t overreact to this weekend’s events. As Ozkardeskaya put it: “It really feels like markets are reacting less and less to the news.”

The potential for Gulf countries like Saudi Arabia or the United Arab Emirates to redirect exports through alternative pipelines also helps cushion fears. While there’s no perfect substitute, some infrastructure allows for partial rerouting away from the strait.

How Long Will the Calm Last?

This balance is fragile. A direct hit on Iran’s oil infrastructure, an actual shutdown of Hormuz, or a broader regional escalation could change the picture within hours. But for now, the message from the market is clear: as long as the U.S. maintains its energy dominance and the tankers keep moving through the strait, there’s no need to sound the alarm.

With information from AFP