Two factors are primarily driving the price of oil. On the one hand, recession worries and expectations regarding global oil consumption are tending to depress the price. On the other, concerns about geopolitical conflicts are exerting upward pressure, and have the potential to cause an explosion in global energy prices.

Brent Crude is currently struggling around the 80 dollars per barrel mark. At the beginning of the month, it had temporarily fallen below 77 dollars. Then better-than-expected figures on US retail sales, and falling inflation, dampened fears of a recession, causing the price of Brent to climb temporarily to over 82 dollars.

At present, the economic data from the USA, and the key indicators for the oil market, do not provide a clear picture. In addition to the retail trade data, the number of new applications for US unemployment benefits recently also tended to argue against the USA slipping into recession. On the other hand, much of the data from the consumer and manufacturing sectors suggests economic weakness. However, services account for around 70% of gross domestic product in the already largely de-industrialised USA.

In China, the economy has proved to be a disappointment following the end of the pandemic measures. Europe and Germany, in particular, are suffering from accelerating de-industrialisation as a result of misguided energy policies and sanctions against Russia. Both the International Energy Agency and Opec economists have recently revised their forecasts for global demand for oil slightly downwards. The Opec analysts explicitly point to the weak overall demand from China as the reason why they have lowered their forecast for Brent by 5 dollars to 85 dollars by the end of the year.

As far as geopolitical events in the Middle East are concerned, we can also speak of a kind of impasse, as there are both plenty of indications of an intensifying confrontation, but also signs that, according to many market participants, speak in favour of an inevitable easing of tensions.

For example, the Israeli assassination attempt on Hamas leader Haniyeh in Tehran on the day of the inauguration of the new President Massud Peseshkian can be seen as a provocation, as is the visit by Israeli Security Minister Itamar Ben Gvir with more than 1,000 radical Jewish settlers to the Temple Mount in Jerusalem, one of the most important Islamic shrines. In addition, according to calculations by Acled, an organisation specialising in conflict research, Israel has killed at least 39 high-ranking commanders of Iran and the Shiite Lebanese militia Hezbollah in a campaign, and the war in the Gaza Strip continues with exorbitantly high civilian casualties. Although there are currently new talks about a ceasefire, Hamas is not taking part due to the killing of Haniyeh, who was also Hamas' chief negotiator.

Meanwhile, according to a report in the Times of Israel, the Israeli government is even considering a pre-emptive strike against Iran if there are clear indications that Iran is preparing an attack. Such a move would mean open war between Israel and Iran, which would, in all likelihood, also involve the USA, which has amassed more military assets in the region than it has for many years. These include an aircraft carrier with escort ships, a nuclear submarine equipped with cruise missiles, ground troops and F-22 stealth fighter jets.

On the other hand, Iran's promised counter-strike has so far failed to materialise, even though Western media have announced it several times in good time, citing alleged sources within the Iranian government. This has already been interpreted in the West and Israel as an indication that Iran could renounce the counter-strike. However, this is extremely unlikely, especially as Iranian religious leader Ayatollah Ali Khamenei recently declared in a speech and on the social network X that a military, political or economic retreat that was more than just tactical would bring the wrath of God.

It, therefore, seems almost inevitable that there will be a military response from Iran. However, the Iranian government is choosing the time and place for this, and preparations are already underway. According to data from the FlightRadar24 website, there is a veritable air bridge between Russia and Iran with transport aircraft from the Russian air force, whereby it is generally assumed that state-of-the-art Russian air defence and electronic warfare systems are being supplied. The Israeli government, in turn, had declared that it would react disproportionately in the event of an Iranian attack.

Only recently, a high-ranking commander of the Iranian Revolutionary Guards held out the prospect of closing the Strait of Hormuz, whose deep-water area suitable for shipping runs through Iranian territorial waters, in the event of a war with Israel. Around 25% of the world's crude oil and around 30% of the world's liquefied natural gas (LNG) is transported by ship through the Strait of Hormuz. A closure of this vital transport artery would inevitably lead to an explosion in the price of crude oil and natural gas.

It is generally doubted that the USA could succeed in keeping the Strait of Hormuz open given the military strength Iran has now achieved – especially as the USA and the UK are currently unable to stop the increasing attacks by Yemen's Houthi rebels on merchant ships in the Red Sea. Meanwhile, Iranian oil production has now returned to a level last seen in 2018. Despite the sanctions, Iran has also managed to find new buyers, most recently Oman and Bangladesh, according to the Reuters news agency. Last month, Iranian Oil Minister Javad Owji said that Iran was now exporting its oil to 17 countries, Iranian news agency Mehr reported. In July, Iranian oil production reached 3.22 million barrels per day (bpd), which compares with a historic high of around 4 million bpd. This is the highest level in six years. Meanwhile, the Iranian economy is booming. In March, economic growth totalled 5.7%. Excluding the oil sector, the figure was still 3.4%.