US-Iran Tensions Drive Oil War Risk Premium Higher

Geopolitical risks are surging as tensions between the United States and Iran escalate, prompting analysts to factor in a significant war risk premium into oil prices. Rabobank highlighted a sharp increase in the probability of a direct military conflict, citing recent media reports and strategic assessments indicating a high likelihood of confrontation. Market participants are increasingly concerned about potential Iranian retaliation across the region, which could severely disrupt global energy supply chains. Consequently, crude oil benchmarks like Brent and WTI are seeing upward pressure as the threat of war looms over the Middle East. In addition to oil, safe-haven assets such as Gold (XAU/USD) are attracting interest as investors hedge against regional instability. Analysts suggest that the current environment reflects a shift toward pricing in worst-case scenarios for global energy security.