Markets are, I’d argue, largely desensitized to geopolitical conflict.

Part of that’s the 24-7, “always on” news cycle and the ubiquity of pocket-sized supercomputers with high-speed internet connectivity.

Something’s always on fire somewhere, and that’s always been the case. The difference is we know about it now.

Any one of the countless war headlines out of the Mideast over the weekend would’ve been enough, in isolation, to fray nerves. But when you’re bombarded with them one after the other, non-stop, it’s too much to process. “Just another school shooting,” to use an aptly horrid metaphor.

Markets aren’t totally numb to geopolitical tape bombs, of course, which is one (but not the only) reason wars tend to start on Saturday mornings. If you give people 36 hours to think things through, they might not sell stocks through the floor. Or drive oil prices through the ceiling.

In the earliest trading this week, crude prices jumped almost 13%. As illustrated below, that would’ve counted as the largest single-session upside move in years if it held.

Prices subsequently pared the advance, and notably didn’t return to the highs amid reports that falling debris from a pair of intercepted Iranian drones forced Aramco to temporarily halt operations at Ras Tanura.

As I discussed here over the weekend, there isn’t a compelling case for an existential spike in crude. That might seem like an absurd thing to say in light of Saturday’s historic events, but even before the US began to dismantle the IRGC’s navy over the weekend, Iran had no capacity to stand up a formal, sustained closure of the Strait of Hormuz.

The IRGC could, however, resort to different sorts of mischief and make threats, thereby changing the risk calculus for transiting vessels. But that’s only “good” for a temporary disruption.

As Bloomberg’s Javier Blas put it, “stoppages are being self-imposed by the shipping and oil industries, in part responding to some insurers withdrawing coverage and in part at the request of the US Navy in the first hours of the conflict.”

Note that even if Iran resolves itself to make life difficult on everyone trying to move energy through this oh-so-crucial maritime chokepoint, leverage cuts two ways. No one’s going to negotiate with the government in Tehran for an end to US-Israeli strikes if the remnants of the regime are determined to leave product stranded in the Gulf.

Put differently: Whatever sympathy GCC states might harbor for Iran will morph into antipathy if the regime makes it difficult for sundry royals and emirs to sell their oil and gas.

In the same linked article, Blas — who knows what he’s talking about — noted that the Kremlin, despite the impending loss of another client state, is pleased with the prospect of higher oil prices and, potentially, more demand for its contraband barrels.

It’s possible, Blas remarked, that Donald Trump could look the other way on Russia’s shadow fleet sales, particularly to Narendra Modi, for a while, if it keeps enough oil on the market to cap prices.

Ultimately, I continue to doubt the veracity of narratives suggesting this event — i.e., the war for regime change in Iran — is sufficient by itself to catalyze a sustained spike in crude prices beyond, call it $90, to say nothing of $100.

This is an election year in the US. Trump knows he’s vulnerable on affordability. As Blas went on to note, “if oil prices get ugly,” Trump, having killed Khamenei, could just claim “‘mission accomplished’ and move on.”