Oil markets have lurched from complacency to panic in a matter of days. Brent crude has surged past $100, climbing roughly 50% since hostilities escalated around the Strait of Hormuz — the world’s most critical oil shipping chokepoint.
But one economist believes the market’s reaction may now be overshooting reality.
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Robin Brooks, senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance, argues that although markets initially were slow to price the disruption, sentiment may now be running ahead of fundamentals.
“Markets were slow to price the enormity of what was happening a week ago,” Brooks wrote. But with Brent now up about 50% since the …
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