On July 23, 2026, global capital markets saw a geopolitical-driven repricing reshuffle.
Last night and this morning, the US-Iran conflict showed no signs of cooling. Both sides issued hardline statements, stressing their respective conflict bottom lines. Trump posted on social media, saying that every time Iran fires at ships in the Strait of Hormuz, the US would bomb and destroy an Iranian bridge or power plant, including facilities located within Tehran and its surrounding areas. Trump also said the US does not need the Strait of Hormuz and would cooperate with Venezuela to produce oil. Iran responded just as firmly: if Iran cannot sell oil, no other country should expect to sell; if Iran’s security is not guaranteed, no infrastructure will be safe. A statement released by the Headquarters of the Khatam al-Anbia Central Command of Iran’s Armed Forces said that if the US carries out its threats, Iran’s armed forces would not allow even a single drop of oil to be exported from the region, and oil, natural gas, electricity, and economic infrastructure in the region would become strike targets.
The conflict’s substantive impact is concentrated in the Strait of Hormuz—the world’s most important energy transportation chokepoint. Iran’s Armed Forces have officially stated that the Strait of Hormuz remains closed. Even after accounting for “black ships” that are not publicly disclosed, oil tanker throughput has already fallen to an extremely low level. At the same time, the Iran-backed Houthi forces in Yemen announced on July 23 that they launched military strikes on two Saudi oil tankers, and risks heading toward the Red Sea have risen in sync.
Against this backdrop, global oil prices surged sharply. According to Gate’s market data, on July 23 WTI crude oil was $87.95, up 2.79% over 24 hours; Brent crude was $91.27, up 1.77%. Brent crude briefly broke above $95 per barrel during the trading session. WTI rose to about $88, a six-week high. The rare simultaneous tightening of two logic lines—previously diverging between geopolitics and fundamentals—has occurred.
Violent swings in oil prices are transmitting to global asset markets through multiple channels. This piece systematically analyzes the transmission mechanism—from how geopolitical risk pushes up oil prices to how oil price gains affect gold, the US dollar, stocks, and crypto assets—providing investors with a logic framework for multi-asset allocation.
Strait of Hormuz: the “master switch” for the global energy market
To understand this round of oil price increases, first you need to understand the strategic position of the Strait of Hormuz.
The Strait of Hormuz connects the Persian Gulf and the Indian Ocean, serving as the world’s most critical energy shipping node. Under normal conditions, countries along the Persian Gulf export more than 20 million barrels of crude oil per day through this strait. About one-third of global seaborne oil trade must pass through this narrow waterway. Any disruption to passage directly hits the global crude oil supply system.
The impact of the US-Iran conflict on the strait this time is far beyond the first conflict in February. The market has seen two key core changes: first, global oil inventories have been consumed for months, substantially reducing buffer capacity, and total oil inventories are already below the level at the end of February when the US-Iran conflict erupted; OECD countries’ strategic petroleum reserves have fallen to a low level since 2003. Second, Cushings inventories fell another 674k barrels last week, plunging into the “bottom-of-the-tank” effect. This means the same geopolitical shock can trigger greater price elasticity in the current environment.
The direct effect of the strait being impeded is supply contraction. With the Strait of Hormuz in a semi-closed state, crude oil export volumes from Iraq, Kuwait, and Iran have been sharply reduced. While Saudi’s East-West pipelines and the UAE’s Fujairah pipeline combined have increased throughput to some extent, they cannot fully offset the supply gap created by blocked seaborne routes. More importantly, idle Middle East production capacity is concentrated in oil-producing countries along the Persian Gulf. Even if OPEC+ intends to increase output, routing production around the constrained shipping lanes to reach the global market is difficult. By July, OPEC+’s nominal remaining effective capacity is only 2.5 million barrels per day, at a historically low level.
Meanwhile, the geopolitical risk premium is being rapidly priced into oil. The key variable in Trump’s latest threats lies in a significant increase in geographic precision—his wording clearly includes “near Tehran or within the city” in the strike coordinates. In the crude oil market, this change in phrasing is being interpreted as a signal that the conflict is escalating further. Iran’s spokesperson Qalibaf said the Strait of Hormuz situation would not return to its pre-war state. Both sides are pressuring through an “escalation against escalation” game model, and in the short term the situation at the strait is unlikely to ease meaningfully.
Goldman Sachs issued a warning: if the Persian Gulf throat crisis continues to worsen, Brent crude could break above $120. The current escalation is occurring at a time when the energy market is extremely fragile, and Ukraine’s ongoing attacks on Russia’s refineries have further tightened global supplies of transportation fuels such as diesel.
Oil price transmission chain: from energy prices to asset repricing
An oil price rise has never been only about the energy market. As one of modern society’s most basic production inputs and an inflation feed variable, changes in crude oil prices transmit to various assets through multiple channels.
Gold: a dual drive of safe-haven demand and inflation expectations
Gold is one of the clearest beneficiaries of this round of geopolitical shocks. Spot gold rose as much as 2%, and spot silver rose 1.5%. COMEX gold futures rose 1.46%, to $4,135.9 per ounce.
The logic behind gold’s rise is relatively straightforward: on one hand, escalation of the geopolitical conflict directly increases safe-haven demand; on the other hand, higher oil prices intensify concerns about imported inflation. Historically, gold has always been a classic tool to hedge against inflation. However, it’s worth noting that if oil prices rise too fast, it could actually limit gold’s upside—because oil-driven inflation expectations may strengthen the Fed’s hawkish stance, suppressing the valuation of non-yielding assets like gold.
US dollar: a tug-of-war between safe-haven inflows and policy expectations
The US dollar index was relatively mild in this round of geopolitical shock—overall it moved sideways and did not continue the prior uptrend. Short-term safe-haven inflows provide some support for the dollar, but the ongoing escalation of the Middle East geopolitical conflict pushing energy prices higher could also create a complicated impact on the dollar.
What deserves attention is that market expectations for Fed policy are changing subtly. The yield on two-year US Treasuries rose 3 basis points on the day to 4.294%, reaching the highest level since February 2025. The tug-of-war between inflation pressures caused by rising oil prices and geopolitical uncertainty will continue to affect the dollar’s direction over the coming period.
Global equities: energy stocks rising, while the market splits as consumer sectors face pressure
US stocks saw a split on July 22. The Nasdaq fell 0.57% to 25,690.90; the S&P 500 fell 0.14% to 7,498.96; the Dow Jones Industrial Average was basically flat. Meta fell more than 2%, leading declines among the tech “Magnificent Seven.” Energy shares broadly rose.
This divergence reflects the market’s two-sided interpretation of higher oil prices: it is positive for energy producers, but it is a pressure for energy-intensive industries and consumer spending. When oil prices climbed to a six-week high, they weighed on tech stocks, so US stocks faced pressure but did not fall sharply. The overall direction of equities depends more on fundamentals and liquidity conditions than on a single geopolitical variable.
Crypto market: the “digital gold” narrative faces another test
Against the backdrop of geopolitical conflict and a surge in oil prices, Bitcoin’s performance is drawing close attention—whether it is truly “digital gold,” or whether it still belongs to risk assets.
Based on July 23 data, Bitcoin was $65,823.9, down 1.01% over 24 hours. During the session, it traded as high as $66,529.6 and as low as $65,550.0. Market cap was about $1.32 trillion, with a market share of 41.49%. Over the past 7 days it was +3.73%, over the past 30 days +0.56%, but over the past year it was -44.85%.
Bitcoin slipped slightly back below $66,000. This contrasted sharply with gold’s rise—spot gold rose as much as 2%, while Bitcoin fell slightly by 0.7%. Looking back at several geopolitical events in 2026, Bitcoin’s response pattern shows clear inconsistency: in February, when the US launched airstrikes on Iran, gold rose while Bitcoin fell; in May, amid repeated back-and-forth during US-Iran talks, Bitcoin largely tracked the performance of US stocks.
This inconsistency points to a core issue: Bitcoin’s asset characteristics are evolving, but it has not yet fully established itself as a safe-haven asset.
From the supply side, Bitcoin’s fixed supply cap (21 million coins) provides the narrative foundation for “digital gold”—in theory, when geopolitical conflicts trigger concerns about fiat depreciation, Bitcoin should benefit. But from the demand side, Bitcoin’s market depth, liquidity, and institutional acceptance still lag far behind gold. In the initial stages of geopolitical shocks, Bitcoin often first behaves like a risk asset and faces short-term selloffs.
That said, some structural changes are taking place. Bitcoin ETFs recorded net inflows for the sixth consecutive trading day. Continued inflows suggest that some institutional investors are including Bitcoin in multi-asset allocation portfolios, which could change Bitcoin’s long-term response pattern to geopolitical events.
At present, Bitcoin’s positioning is closer to a “high-volatility liquidity asset.” It lacks the centuries-long safe-haven credit accumulation that gold has, and it is not as highly correlated with economic growth as traditional risk assets. In a geopolitical conflict environment, Bitcoin’s price direction depends on the tug-of-war between two forces: whether safe-haven capital treats Bitcoin as a substitute allocation option for gold, and whether declining risk appetite triggers broad-based selling.
Multi-asset allocation: response thinking
When facing market volatility driven by geopolitical conflicts, holding a single asset often comes with significant uncertainty. From an asset allocation perspective, understanding how different assets react differently to the same geopolitical variable is the basis for building a resilient portfolio.
In the current environment, the logic behind oil’s rise is relatively clear—supply disruption is a real shock, not just a forecast. Trump has threatened strikes down to specific coordinates in central Tehran, while Cushings inventories continue to fall toward operational limits, and US crude oil production has fallen from record highs. Together, these factors systematically shrink the room for oil prices to fall. But oil’s upside is constrained by demand-side pressure and by the release schedule of OPEC+’s remaining capacity.
Gold’s safe-haven logic remains valid in the current environment, but investors should watch how shifts in Fed policy expectations suppress its valuation. The US dollar’s path is more complex: the tug-of-war between short-term safe-haven inflows and mid-term inflation pressure will continue.
For investors who want to participate in multi-asset trading, Gate’s TradFi CFD products cover traditional asset classes including crude oil (WTI crude, Brent crude), gold, and silver. Users do not need to switch platforms or open additional accounts; they can participate in spread contract trading for traditional financial markets within their existing account system. This cross-market integration improves allocation flexibility, allowing investors to adjust between different asset classes based on market dynamics.
It’s important to emphasize that market volatility driven by geopolitical events is often highly uncertain. The evolution of the Strait of Hormuz, the pace of the US and Iran game, and OPEC+’s policy response are all variables that are difficult to predict precisely. Any asset allocation decision should be based on investors’ own risk tolerance and investment goals.
Conclusion
On July 23, the latest statements from both the US and Iran indicate the conflict is still escalating rather than converging. Trump expanded strike targets from military facilities to civilian infrastructure and included “within Tehran city” in the strike coordinates; Iran countered with a reciprocal threat of “not allowing even a drop of oil to be exported from the region.” With the Strait of Hormuz closed, Yemen’s Houthi forces in the Red Sea direction also launched attacks in parallel. The two key waterways of global energy supply are simultaneously at risk—this is the biggest difference between this conflict and past geopolitical events.
At a time when multiple supply shocks are stacking up and inventory buffers are extremely limited, the logic behind oil price gains has solid fundamental support. And as oil prices transmit into gold, the US dollar, stocks, and the crypto market, the way various assets are priced is being reshaped. For investors, understanding this transmission mechanism is more practically meaningful than trying to predict the price path of any single asset.
FAQ
Why can the US-Iran conflict directly affect global oil prices?
The key impact channel of the US-Iran conflict on oil prices is the Strait of Hormuz. About one-third of seaborne oil globally must pass through this strait. Under normal conditions, countries along the Persian Gulf export more than 20 million barrels of crude oil per day through it. Iran’s Armed Forces have officially stated that the strait is closed. Global oil inventories are currently at historically low levels; Cushings inventories have entered the “bottom-of-the-tank” effect, leaving very limited supply buffer space. Goldman Sachs warned that if the crisis worsens, Brent crude could break above $120.
Does a rise in oil prices always push up gold?
Rising oil prices typically benefit gold through two channels: first, a geopolitical conflict directly increases safe-haven demand; second, higher oil prices intensify inflation expectations and strengthen gold’s hedging attribute. On July 23, spot gold rose as much as 2% and COMEX gold futures rose 1.46%. However, note that if oil prices rise too quickly, it may limit gold’s upside—warming inflation expectations could strengthen the Fed’s hawkish stance, thereby suppressing the valuation of non-yielding gold.
How has Bitcoin performed during geopolitical conflicts?
On July 23, Bitcoin was $65,823.9, down 1.01% over 24 hours, while spot gold rose as much as 2%. Historical data show Bitcoin’s performance during geopolitical conflicts is inconsistent—gold rose while Bitcoin fell in the early stages of the February conflict; during the May negotiations, Bitcoin largely tracked US stocks. Currently, Bitcoin is closer to a “high-volatility risk asset” than to “digital gold.” However, Bitcoin ETFs recorded net inflows for the sixth consecutive trading day, suggesting the institutional allocation trend is changing.
How to do multi-asset allocation during geopolitical conflicts?
The core logic is to build a portfolio using the different reactions that different assets have to the same geopolitical variable. Crude oil benefits directly from supply disruptions; gold benefits from safe-haven demand and inflation expectations; the US dollar is influenced by both safe-haven flows and policy expectations; equities vary by industry. Investors can trade crude oil, gold, silver, and crypto assets on the same platform through Gate TradFi’s CFD products, adjusting allocations flexibly as markets change.
How is this oil price rally different from previous ones?
The key difference this time is the rare simultaneous tightening of two diverging logic lines from multiple factors: geopolitics and fundamentals. Trump’s threats specify strike coordinates in downtown Tehran; Cushings inventories continue trending down toward operational limits; US crude oil production has fallen from record highs; the Red Sea and the Strait of Hormuz both face navigation risks. Overall oil inventories are already below the level at the end of February when the US-Iran conflict erupted. The same geopolitical shock can generate greater price elasticity under current conditions.
