Iran and Saudi Arabia tensions do not spell bad news for oil

At almost any other time, an escalating diplomatic conflict between Opec members Iran and Saudi Arabia would mean a spike in oil prices.

That the rally this time couldn’t be sustained shows just how abnormal things are in the oil market.

Brent crude has fallen 0.5% this week as a global supply glut and the slowest Chinese growth in a generation trumped mounting strife between the nations on either side of the world’s busiest waterway for oil tankers.