Iran's long-smoldering crisis has burst into a full-blown political and economic upheaval that now threatens the very survival of the Islamic Republic under Supreme Leader Ayatollah Ali Khamenei.
What began in late December as protests over crushing inflation and the collapse of the Iranian rial has quickly morphed into the most widespread anti-government uprising since the 1979 revolution — and has global markets on edge.
Why Iran Is At The Centre of Energy Market Anxiety
On Wednesday, the West Texas Intermediate crude – as tracked by the United States Oil Fund (NYSE:USO) – rose for the sixth straight session to $62 a barrel, a level not seen in roughly three months, as traders priced in heightened risk from potential disruption in oil supplies and the shadow of U.S. military action.
Analysts describe the price action as largely driven by uncertainty over Iran's future and the potential for Western military intervention that could disrupt exports or threaten key chokepoints like the Strait of Hormuz — through which a fifth of the world's crude supply passes
"This price move is largely about the uncertainty with what may happen in Iran," Jeff Krimmel, founder of Krimmel Strategy Group, told Benzinga.
"The market is pricing in stronger U.S. military action than it would have expected a couple of weeks ago."
Trump's Hard Line On Iran And Rising Odds of US Military Intervention
Prediction markets have also shifted sharply: the odds of a U.S. military strike on Iran by the end of the month are currently priced in as high as 81% on betting platform Polymarket.
The very continuity of the Islamic Republic of Iran, established after the overthrow of the Pahlavi-era monarchy in the late 70s, is now being weighed by markets — with Polymarket pricing a 56% probability that Ali Khamenei is out as Supreme Leader by June 30.
Earlier this week, Washington ordered 25% tariffs on countries that continue to trade with Tehran and is weighing "very strong options," language markets interpret as widening the scope for military action.
According to CNN reports, U.S. military personnel have been ordered to evacuate certain strategic bases in the Gulf region as a precautionary measure ahead of potential intervention.
At least 2,400 protesters have been killed since Iran's crackdown began last month, according to a U.S.-based rights group, and the internet blackout continues.
What This Means for Energy Markets
For now, the crisis premium in oil markets remains a dominant force — but it's competing with countervailing dynamics, according to Krimmel.
"We will see prices seesaw," he said, as traders with divergent geopolitical risk models react to breaking developments.
On the one hand, heightened fears of U.S. involvement and further escalation are pushing energy prices up.
On the other, strategic considerations — including U.S. interest in maintaining manageable oil costs and avoiding a broader Middle East conflict — serve as brakes on runaway price spikes.
“President Trump has expressed a strong desire for oil prices to remain as low as possible,” he said.
Iran's future is in a state of profound uncertainty.
The regime's hold on power, already seriously questioned by its own citizens, now faces not only internal revolt but the specter of external pressure that could redefine the Middle East balance of power.
Photo: Anton Watman/Shutterstock
