Lesson Learned: Not respecting the geopolitical premium in oil

I've been trading commodities for a few years now, and one of my biggest lessons learned, particularly in the oil space, came from underestimating the geopolitical premium. I remember shorting $WTI around the $70 mark last year, feeling pretty confident about the supply/demand picture, especially with the rhetoric around increased output. What I failed to adequately factor in was the simmering tension in the Middle East at the time; it wasn't a hot war yet, but the rhetoric was enough to add a non-fundamental buffer to prices. My stop was hit pretty quickly when a minor incident caused a knee-jerk reaction up, and while the move eventually faded, that initial spike based on geopolitical uncertainty taught me to always overlay the macro political landscape, especially in energy. It's not just about barrels and consumption; it's also about perceived risk.