The media thinks the Iran war could trigger a financial apocalypse, but the markets are pricing a temporary oil spike. Lance Roberts says one of them is going to be badly wrong.
Most people assume that if missiles are flying across the Middle East, financial markets must be screaming that disaster is coming.
Lance says they're doing almost the opposite.
Yes, oil has climbed, but not to panic levels.
More importantly, the futures market is still pricing oil back down into the $60-$70 range over the next six to twelve months.
In other words, investors are making a very specific bet: the war remains contained, oil flows will eventually normalise, and the current price spike is temporary.
That doesn't mean they're right; it simply means the market is dismissing many of the worst-case scenario headlines.
The reason for that confidence is that the world has already started adapting; countries are building alternative pipelines and shipping routes are changing.
Every lesson learned from previous Hormuz disruptions makes the next one slightly less economically devastating.
That's why Lance believes there's now a third scenario people often ignore: The war could continue without triggering the kind of oil shock many assume is inevitable.
If supply keeps flowing through alternative routes, stockpiles hold up, and markets believe the disruption is temporary, oil prices may stay far more contained than the headlines suggest.
But he isn't dismissing the danger; he's warning the markets may be making a very optimistic assumption.
History is full of regional conflicts that everyone believed would stay contained... until they didn't.
@LanceRoberts
