The US-Israel conflict with Iran was supposed to be the energy market’s worst nightmare. Iran closed the Strait of Hormuz on March 4, choking off roughly 20% of global seaborne oil trade. The International Energy Agency called it the largest supply shock in its history, with global supply plunging 7.5%. Brent crude rocketed past $120 per barrel.

By mid-July, Brent was trading below $75 per barrel. Bloomberg Originals is now examining why the chaos everyone expected never fully materialized, and the answer has implications that stretch well beyond traditional energy markets and into the world of crypto.

How the oil market absorbed a historic shock

Gulf state oil production dropped by at least 6.7 million barrels per day, with cumulative losses potentially exceeding 10 million barrels daily at their peak. By April 2026, cumulative supply losses were estimated at around 1 billion barrels.

The IEA coordinated emergency stockpile releases from member nations, flooding the market with strategic reserves specifically designed for moments like this. Saudi Arabia and the UAE rerouted exports through alternative pipelines and ports, bypassing the Hormuz bottleneck. And temporary sanctions waivers allowed additional supply to reach global markets through channels that would normally be restricted.

While crude prices retreated, refined products like gasoline and diesel maintained pricing as if crude were still above $100 per barrel. That gap between crude and refined product prices tells a more complicated story than the headline number suggests.

Bitcoin’s rollercoaster and crypto’s Iran connection

Bitcoin dropped from approximately $72,000 to about $63,000 in the initial shock, a roughly 12.5% decline that tracked the broader risk-off sentiment sweeping through global markets.

As energy market emergency measures kicked in and crude prices began retreating from their peaks, Bitcoin rebounded toward the $67,000 to $69,000 range.

On the decentralized trading side, oil perpetual futures on platforms like Hyperliquid saw roughly a 5% intraday surge during the early escalation. DeFi platforms offering synthetic commodity exposure operated 24/7 while traditional commodity exchanges were closed.

According to Chainalysis reports, Iran increased its utilization of cryptocurrencies for sanctions evasion and facilitating payments as the conflict intensified.

What this means for investors

Refined product prices remain stubbornly elevated, which means consumers and businesses are still feeling the pinch even as headline crude numbers look manageable.

The Bitcoin-oil correlation observed during this crisis also deserves ongoing attention. Bitcoin sold off alongside equities when geopolitical risk spiked and recovered when that risk abated.

The IEA stockpile releases that calmed markets in March can’t be repeated indefinitely. If the conflict escalates again or drags on longer than current geopolitical expectations suggest, the playbook that worked the first time may prove insufficient the second time around.