NewsNTech
The geopolitical risk premium embedded in crude prices is the market mechanism that converts a ballistic missile strike into a commodity move. It functioned as designed when Iran attacked U.S.
forces, ending a brief pause in the exchange of strikes between Washington and Tehran.
The risk premium and how it moves Oil markets price two things at once: physical supply fundamentals and the probability of disruption to those fundamentals.
The Middle East carries substantial weight in global oil supply, which means direct military exchanges in the region translate immediately into crude pricing. Ballistic missiles directed at U.S.
Keep reading