# Part 2: Iran Conflict Boosts Oil Prices — Using 3 Indicators to Assess if This Rally Is Sustainable

March 4, 2026, Brent crude oil rose over 7% due to escalating Iran conflict, breaking through $78.
This is not just a geopolitical premium.
It’s a clear mismatch between supply chain structure and liquidity expectations.
💥 Structural Break Point
The market’s original expectation of “war → risk aversion → gold rally” has failed again, with funds flowing into commodities instead.
While oil prices are rising, the dollar is strengthening and real yields are slightly increasing, which contrasts sharply with typical safe-haven behavior during historical wars.
❓ My Judgment
When risk-averse funds do not flow into traditional safe assets but instead directly push up commodity prices, it indicates the market is re-pricing liquidity based on “supply risk.”
Is this oil price increase structural or short-term sentiment? Three indicators need to confirm simultaneously.
Observe whether the following three indicators change in sync:
❓ Step 1: Real Yields (10Y TIPS)
Check if the DFII10 on FRED is continuing to rise.
If real yields increase along with oil prices, the opportunity cost will suppress long-term bullish positions.
❓ Step 2: US Dollar Index (DXY)
Check if the daily chart stays above the 20-day moving average and continues to strengthen.
When the dollar is strong, the upward momentum of commodity prices is usually limited by capital costs.
❓ Step 3: CFTC Crude Oil Futures Report (COT)
Check if speculative net long positions are overly concentrated.
If speculative positions have reached historical highs, caution is needed in assessing the continuation of the rally.
Conditional Tree
If all three indicators align → Structural confirmation (the rally may be due to short-term supply shocks)
If only real yields and the dollar are rising together → Still under observation
If COT speculative positions reverse downward → The original rally scenario may be invalid
Today’s One Thing
Today, focus on one thing:
Confirm whether the 10Y TIPS real yields have shown a two-day consecutive upward trend.
This is the top priority for assessing whether the oil price rally is sustainable.
Markets can lie, but processes won’t.
What’s your view?
Is this oil price increase a short-term supply premium driven by geopolitics, or the turning point where commodities become safe-haven assets again in the era of liquidity?
Premium users are welcome to share the key indicators you are currently observing below.
#DivergenceLog # Structural Break