Just like your one CNN-obsessed uncle, the price of oil is sensitive to big geopolitical events.

And with that uncle glued to the TV on Tuesday, the world’s two leading oil benchmarks rose more than 4% as an armed conflict between Israel and Iran that broke out on June 13 stretched into its fifth day. With no immediate end in sight, analysts are weighing multiple possibilities that could affect prices down the line.

The Strait and Narrow

Even with US sanctions, Iran remains the third-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), pumping 3.3 million barrels of crude oil daily and exporting 1.7 million of them. ING analysts said last week that losing this export supply would be enough to erase a global oil market surplus forecast for this year — in March, the International Energy Agency predicted a roughly 600,000 barrels-per-day oversupply for 2025. That surplus, they forecast, would have led to prices trending lower in 2026. Without it, Brent crude prices could climb as high as $80 a barrel, though they will more probably settle at $75. (Brent crude futures closed at $76.45 a barrel on Tuesday, up 4.4%, and US West Texas Intermediate crude closed at $74.84 a barrel, up 4.3%.)

Whether oil prices remain elevated long-term depends entirely on how the conflict plays out or whether it continues (the Trump administration has offered mixed messages about its desire to broker peace). Both sides have targeted energy infrastructure: Iran, for example, had to temporarily pause some operations at the South Pars field, the world’s largest gas field, after it was hit by an Israeli air strike on Saturday. ING’s analysts noted that further targeting of upstream assets would have a greater impact on the global oil market by crunching the export supply. But there’s an even more acute risk:

• An extended conflict could disrupt shipping in the Strait of Hormuz, the only sea route from the Persian Gulf to the open ocean, and thus one of the most strategically important maritime passages on Earth. Nearly a third of the world’s seaborne oil is funneled through the channel, which is a mere 29 nautical miles wide at its narrowest point.
• ING’s analysts calculated that 14 million barrels of oil supply per day might be at risk. In a worse scenario, they wrote, a major disruption in the strait might drive Brent crude prices up to a whopping $120 a barrel by the end of the year, well above the $147.50 high set during the 2008 financial crisis.

BIMCO, the world’s largest international shipping association, told CNBC on Monday that some shipping groups are already steering clear of the strait.

Double Trouble: But wait, the Hormuz dominos don’t end there. European natural gas prices jumped nearly 5% Friday and were at the highest levels since early April on Tuesday. That’s because Qatar, which accounts for a fifth of the global liquified natural gas (LNG) trade, exports through the Strait, meaning the LNG market is also under threat of severe tightening.

There’s a big regulatory shift under consideration in Washington. Possible side effects could be lethal for cable TV.

On Tuesday, Bloomberg reported that the White House is considering policies that would ban pharmaceutical companies from directly advertising to patients. The news comes just after Senators Bernie Sanders and Angus King introduced a bill with similar intentions last week. If it goes into effect, it could leave a $10 billion void in the advertising ecosystem.

Cable Blues

TV ads for pharmaceutical products are an almost uniquely American phenomenon (almost, because the only other country that allows direct-to-consumer advertising of pharmaceutical products is New Zealand). But there was a time, before a deregulation push in 1997, when American TV was nearly as pharma-free as everywhere else. Not because such ads were illegal but because pharmaceutical companies were once required to disclose all possible side effects of their products in advertisements — a process requiring so much air time that buying ad slots proved prohibitively expensive. Yes, believe it or not, the dulcet, rapid-fire listing of possible side effects at the end of pharmaceutical ads today only includes a partial list of a drug’s “most important” health risks.

Now, the White House is considering rolling the clock back to 1997, which experts view as one way to effectively block the ads without triggering First Amendment lawsuits (the Senate bill, meanwhile, is slightly broader, and it remains unclear how it would avoid similar legal challenges). The new regulations would represent another knockout blow to a linear TV industry already suffering from Netflixthelioma — with the TV news business looking especially vulnerable:

• In 2024, companies spent a total of $10.8 billion on advertising direct-to-consumer pharma products, according to a report from the advertising data firm MediaRadar. Pharma companies accounted for as much as 12% of all national linear TV ad spending last year, according to iSpot.
• For news stations — where the average viewer is in the sexagenarian to septuagenarian age bracket — the share is much higher. Through May of this year, drugmakers accounted for nearly 25% of ad minutes across evening news blocks on NBC, MSNBC, ABC, CBS, CNN and Fox News, according to iSpot.

Take Your Medicine: It’d be a major dent for drugmakers, too, who tend to say their ads promote disease awareness and can prompt patients to discuss certain medical conditions with their doctors. For instance, AbbVie’s Skyrizi, which treats moderate to severe plaque psoriasis, generated $2.9 billion in revenue in the US in the first quarter of the year, compared with just $506 million in all international markets combined. The imbalance could possibly be explained by the company’s massive ad spend for the product in the US, where it’s one of the most heavily promoted drugs: AbbVie spent nearly $90 million in the first quarter on TV ads for the drug, according to iSpot, after spending almost $126 million in the last three months of 2024.

To catch up in the AI race, Elon Musk’s xAI is going to have to burn some proverbial rubber — and lots and lots of literal cash.

On Tuesday, Bloomberg reported that Musk’s artificial intelligence startup is in talks to raise $4.3 billion in an equity investment — on top of the $5 billion it had already been trying to borrow from debt investors. According to a separate report from Bloomberg, the fundraising comes as the company continues to burn through a remarkable amount of cash every month.

Burn, Baby, Burn

Training and operating AI models is expensive. Like, very expensive. According to one estimate from tech pundit Ed Zitron, OpenAI’s total costs may exceed $25 billion this year alone. Carlyle Group CEO Harvey Schwartz recently predicted in a shareholder letter that the industry as a whole will shell out some $1.8 trillion by 2030 to build out AI infrastructure.

xAI is no different than its peers (and, in fact, may be burning through cash even faster than its peers in an attempt to catch up). Unlike OpenAI and industry frontrunners, the Grok chatbot operator has hardly established a revenue stream to offset its rapid burn rate:

• xAI has been burning through $1 billion per month to build its advanced AI models and expects to spend $13 billion this year alone. The company has raised $14 billion in equity fundraising since its launch in 2023, though as of March 31, it had only $4 billion left on its balance sheet, according to materials seen by Bloomberg.
• On the flip side, the company expects just $500 million in revenue this year. Comparatively, OpenAI recently claimed to have hit $10 billion in annual recurring revenue, driven in part by 3 million paying business users.

X Marks The Spot: Still, xAI does expect the tables to turn eventually. That’s based partly on the hope that its recent merger with fellow Musk venture X (formerly known as Twitter) could prove to be a fruitful partnership. The thinking is that access to X’s content could offer a cheap (or free) alternative to paying for content elsewhere. Because nothing says “quality training data” like an endless stream of memes, jabs and cat videos.