a day ago
Oil Steadies as Mideast Escalation Concerns Continue
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What is your analysis, your assessment right now of of the oil market adjustments around this with Brent up just just 2/10 of a percent, but at 60, $76 a barrel in the session today. How much how much risk premium is priced in at this point? Good morning, Tom. Yeah, I mean, the risk premium that you'll see is that almost 10% increase that you've seen. You mentioned since the assault started on Friday the 13th. And we did see a big jump at the start of trading this week when we had those first initial attacks on some energy infrastructure in Iran, albeit those were domestic facilities. So so we have seen that that risk premium built in. Arguably there was some risk premium already supporting prices anyway, as a lot of traders were saying that prices could have been lower than the roughly 60 to 65 range that we'd seen before. This because of some of the tension here in the region. But at that kind of $75 area where market is really not signaling that they're concerned about an interruption in supplies. So the market is hedging its bets for a little bit. But really, we are in completely uncharted territories because we are in the first time where there's this massive state on state conflict between countries like Iran and Israel. You know, just think about what Joumanna was speaking about before. We we're kind of passing social media posts from the president to try to figure out what U.S. policy is going to be. So so it's really a lot of a lot of guesswork here. The signals are, of course, if there's more U.S. military equipment coming to the region, if Trump is speaking with security team, that signals there could be more escalation. But this goes completely against what some of Trump's base and some of his domestic supporters want, and I think against his his intent in terms of avoiding war. So we really have to see whether he's going to take that step to make a major escalation. And from Iran's point of view, they clearly want to avoid that, that bringing to bear of more military force by the United States on them. So the question is, would they lash out even if the U.S. is supporting Israel with with arms and with some support, would they lash out against bases that would then bring the U.S.? And so we're really in uncharted territory in trying to figure out how this is going to happen. Will cooler heads, as it were, prevail in terms of keeping the conflict combined confined at least to those two states, or will it spread out? And that's where the real risk comes in for the oil market. If that spreads, if there's any interruption of supplies, if it spreads to other producing countries in the region, which those countries here are really at great pains to to avoid. So so that's that's really a lot of things that the market has to take in. But right now they're not signaling concern about supply to.
