The weirdest aspect of the Iran war that has befuddled oil experts | CNN Business

For two months, the economic narrative about the Iran war boiled down to this: Oil and gas prices are really high, exacerbating an affordability problem that could send America’s economy into the toilet. No doubt prices are high, increasing the risk of a recession. But there’s a key problem with that story: Prices aren’t as high as they should be, considering the historic destruction of the world’s oil supply. Oil was supposed to be at $150 by now, according to analysts’ expectations at the outset of the war. Some more aggressive forecasts predicted oil could rise even higher. “I would have expected prices to be above $200. It’s crazy,” said Matt Smith, lead oil analyst at Kpler. “Everyone is scratching their heads about this.” Can your wallet withstand high gas prices? Let us know Ignore your Econ 101 class for now: Supply and demand can only explain so much. The math doesn’t math. Something else is happening. Let’s go through the possible explanations. Crude output in the United States, Latin America and other regions outside the Persian Gulf have grown – by historic levels, in the case of the United States. But they can only increase production so much,