Crude oil prices fell slightly today, March 4, after hitting $84 per barrel the previous day. Currently, oil is $81. The decline is due to recent diplomatic efforts to stem the conflict that began on February 28 between the United States, Israel, and Iran.
While it was relatively stable at the end of February, with barrels hovering around $72, the chart below shows the immediate rebound after fighting broke out.
In any case, apart from the current slight slowdown, prices remain relatively high. A barrel of crude oil is trading at levels not seen since January 2025, confirming that traders continue to apply aggressive risk premiums. The analysis is based on Brent, the reference material for two-thirds of the world’s crude oil and the primary thermometer for seaborne energy.
This moderation in the energy sector was announced after the newspaper new york times Revealing indirect contacts between the Iranian Ministry of Intelligence and the US CIA.
Diplomatic sources from various countries in the region and Western countries (who chose to remain anonymous) said: All parties, including the United States, Israel, and Iran, would have indicated a willingness to negotiate a cessation of hostilities through third-party mediation..
Despite this approach, investors remain cautious as they assess the real impact of Iran’s closure of the Strait of Hormuz, a critical route through which 20% of the world’s oil passes. If this blockade is prolonged, the price of a barrel could break the $100 barrier, but this scenario has not yet materialized as there are doubts about Iran’s actual military ability to maintain the blockade following recent attacks.
This operational uncertainty explains why prices do not rise more aggressively. Allowing other assets such as Bitcoin (BTC) to start reacting positively to the easing.
Energy affects Bitcoin
Lower oil prices reduce the threat of an inflationary spiral and open the door to more liquidity in the system.
This optimistic environment is one of the factors that propelled Bitcoin above $70,000, with a 4.5% gain in the past 24 hours and an 11.4% rally in the past week, as seen in the chart.
Energy directly affects global monetary policy and therefore the movement of Bitcoin. Conflicts in the Middle East have significantly changed global energy flows, forcing production shutdowns and threatening price stability.
A sustained rise in oil prices would have caused global inflation. Rising fuel costs automatically make all goods more expensive to transport and produce, forcing the US Federal Reserve to maintain high interest rates for an extended period of time to suppress consumption.
Although this “expensive” funding environment is clearly disadvantageous for assets considered “risky” like Bitcoin, The current easing in oil prices has eased this pressure on the Fed and general investor sentiment has improved..
The market faces a contradiction
This scenario again presents a contradiction. On the other hand, if volatility worsens the situation for risk assets, the price of Bitcoin could fall.
On the other hand, these same crisis situations may encourage the purchase of Bitcoin, as it is perceived as a haven asset compared to the traditional financial system.
Two types of investors currently coexist. Those who sell in the face of global uncertainty and those who buy for protection; Prices can skew towards either side of the band depending on which story takes precedence.