Here's something you don't see every day: the U.S. Dollar and oil prices are rallying together. And by "not every day," I mean this hasn't happened since 2005.

According to the Kobeissi Letter, the 60-day correlation between Brent crude oil and the Bloomberg Dollar Spot Index has climbed to 0.55 — the highest level since the index was created two decades ago. That's a big deal because these two usually move in opposite directions. Oil is priced in dollars globally, so when the dollar gets stronger, oil becomes more expensive for international buyers, and demand — and prices — tend to fall.

But we're not in normal times. This weird alignment started in early March, right around the time the Iran war began, and it's stuck around since. The Bloomberg Dollar Spot Index has risen for five straight sessions, while Brent crude has gained in four of the last five. This is only the second time we've seen a correlation above 0.50; the first was just a few months ago, in late 2025.

So what's going on? Geopolitics. The war is driving demand for both the dollar as a safe haven and oil as a commodity tied to supply disruptions. It's a rare moment where both are getting bid up at the same time.

The plot thickened on May 6, when a mystery trader shorted about $920 million in crude oil just before reports surfaced that the U.S. and Iran might be nearing a deal to end the war. That sent oil prices plunging over 12% in a single day. But the war hasn't ended, and the correlation persists.

Meanwhile, President Donald Trump has been floating the idea of eliminating gasoline taxes to give consumers some relief as the war drags on. But economist Peter Schiff warned on May 12 that cutting gas taxes could weaken the dollar and actually push oil prices higher, potentially increasing demand while widening deficits.

And on May 5, Senator Bernie Sanders accused oil companies of exploiting the Iran war to jack up prices, calling for a "windfall profits tax" and an end to the conflict.

So we've got a historic market anomaly, a war, a mystery trader, and political maneuvering — all wrapped into one story. The dollar and oil are dancing together, and for now, nobody's quite sure when the music will stop.