The Illusion That War Moves Oil Prices

Every time there is a geopolitical conflict, the same narrative repeats itself. The news starts shouting that oil prices are rising because of war, supply disruptions, or political instability. Traders jump into charts already biased, convinced that price must go higher simply because the situation feels tense. But when I step back and look at crude oil and Brent futures through the lens of supply and demand trading, the story becomes very different.

What most traders fail to understand is that price does not react to headlines — it reacts to imbalances. The institutions that truly move the market position themselves at key supply and demand zones long before the news reaches the public. By the time retail traders are reacting emotionally to geopolitical events, price has already reached areas where decisions were made months or even years earlier. That’s why learning to trade using price action and supply and demand imbalances gives a completely different perspective on what is really happening.

The 2022 Oil Collapse Nobody Talks About

Let’s go back to 2022, when the war in Ukraine began. If the common narrative were true, oil prices should have continued rising aggressively due to uncertainty and fear. Instead, Brent crude oil dropped approximately 52% from its highs. That alone should already raise questions about the idea that war automatically pushes oil higher.

The reality is that price had already reached a massive monthly supply imbalance. Institutions had positioned themselves to sell at those levels, and once price entered that zone, the imbalance took control. It didn’t matter what the headlines were saying or how dramatic the Ukraine war situation looked globally. Supply was dominant, and price reacted accordingly.

This is where most traders get trapped. They try to interpret the market using logic driven by news, while the real logic is already embedded in the chart through supply and demand. When you learn to trade forex, stocks, or commodities using this approach, you start to see that price movements are not random — they are structured reactions to imbalances.

The Power of the 12-Month Demand Zone at $61

After that massive drop, Brent crude oil reached a 12-month demand zone around the $61 level. This was not just any level; it was a higher timeframe imbalance where institutions had previously accumulated positions. When price returned to that zone, demand took control exactly as expected.

From that point, Brent rallied approximately 100%. Think about that for a moment. While the war was still ongoing, and uncertainty remained in the market, price doubled from that demand zone.

What actually happened is much simpler and far more powerful. Price reached a higher timeframe demand imbalance, and buyers stepped in. That’s it. No need to interpret headlines, no need to predict political outcomes. The chart already contained the information needed to understand where price was likely to react.

This is the essence of price action and supply and demand trading and why I always emphasize the importance of the bigger timeframes. When you learn to trade stocks, commodities, or forex using supply and demand trading strategies, you begin to trust what price is showing instead of what the news is telling you.

Monthly Supply Is Now Back in Control

Fast forward to the present, and Brent crude oil has now reached a monthly supply imbalance created during that same 2022 period. This is a critical point because it shows how the market is still respecting the exact same zones years later. These are not random levels — they are areas where large institutional orders were placed, and those orders still influence price today.

Since reaching that monthly supply zone, Brent has already reacted with a drop of approximately 19%. Again, this reaction has nothing to do with the current geopolitical tensions involving Iran, the United States, or Israel. The reaction was expected simply because price returned to a higher timeframe supply imbalance.

At this stage, Brent crude oil is effectively trading between two dominant forces: the 12-month demand zone around $61 which gained control before the Iran war started, and the monthly supply zone above which was created when the Ukraine war started back in 2022. This creates a range controlled entirely by institutional imbalances. Price is moving from one imbalance to the other, and everything in between is just noise.

Why Petrol Prices Don’t Match Reality

One of the most confusing aspects for retail traders is the disconnect between what they see in real life and what is actually happening in the charts. During periods of geopolitical tension, petrol prices often spike, reinforcing the belief that oil must be rising because of the news.

However, as we saw during the Ukraine war, Brent crude dropped significantly while the narrative suggested the opposite. This mismatch happens because retail perception is driven by headlines and short-term reactions, while the market itself is governed by higher timeframe supply and demand imbalances.

This is why so many traders struggle. They are trying to align their trading decisions with what feels logical in the real world, instead of what is structurally happening in the market. When you shift your focus to supply and demand trading, you remove that confusion and start operating based on objective price action.

The Strait of Hormuz Doesn’t Change the Chart

Right now, there is a lot of speculation about what could happen if the Strait of Hormuz were to be disrupted. This kind of scenario creates fear, and fear creates impulsive decisions. But from a supply and demand perspective, nothing changes unless price reaches a new imbalance.

If Brent is sitting at a monthly supply zone, that is the controlling factor. It doesn’t matter if the news is bullish or bearish or if the Strait of Hormuz is opened or closed. The imbalance is what dictates the reaction. Until that supply is removed or a new demand imbalance is created, price will continue to behave according to those institutional levels.

This is one of the hardest concepts for traders to accept, but also one of the most powerful. When you learn to trade crypto, forex, or commodities using price action and supply and demand, you stop reacting to noise and start focusing on what truly moves the market.

The Real Edge to Trade Crude Oil: Patience Over Emotion

Trading is not about predicting the future or reacting to every piece of news. It is about waiting. Waiting for price to reach areas where the probability is in your favor. Waiting for the market to come to you instead of chasing it.

Most traders fail because they let emotions drive their decisions. Fear during war, greed during rallies, panic during drops. But when you understand higher timeframe imbalances, you realize that the market is not chaotic — it is structured.

The real edge comes from patience. From trusting that price will eventually return to supply and demand zones. From understanding that institutions operate on a completely different timeframe than retail traders.

And once you see that, you stop trading like everyone else.

Final Thoughts

Crude oil and Brent futures are a perfect example of how markets truly operate. Despite wars, political tension, and constant media noise, price continues to respect the same supply and demand imbalances created years ago.

The market is not reacting to the news. The news is reacting to the market.

If you want to learn to trade stocks, commodities, or forex with confidence, you need to shift your focus away from fundamentals and toward price action and supply and demand trading strategies. That is where the real logic of the market lives.

And once you understand that, everything changes.