Somehow, it’s difficult to picture hedge fund managers standing around their desks poring over maps of northern Iraq. If they were, Nymex crude oil would surely not be trading around $88 a barrel, another all-time record in nominal terms.

Say Turkey does invade Kurdish northern Iraq. Only a trickle of oil flows through the main pipeline linking the region to Ceyhan on the Turkish coast, anyway. Iraq does export around 1.5m barrels of oil per day – equivalent to perhaps 40 per cent of the world’s spare production capacity. But virtually all of that is produced and exported in the south. Crude prices were arguably already factoring in a $15-20 per barrel geopolitical premium. So while Turkish sabre-rattling does not help, neither does it explain the current spike.