Oil’s risk premium is back!

Rising oil tests resilience; reform may restore confidence; geopolitics reclaims its pawer over energy prices

- Palazhi Ashok Kumar

War has returned to the balance sheet. With it comes a reminder markets periodically forget: energy is never just a commodity. It is strategy, leverage and, in moments like this, fear priced in real time.

The confrontation involving Tran, the United States and Israel has revived the language of chokepoints and convoys. The Strait of Hormuz is no longer a distant geographic detail; it is a risk premium embedded in every futures contract. Oil is not scarce. Confidence is.

In the immediate term, crude will carry a geopolitical surcharge. Insurers are recalculating exposure. Shippers are reassessing routes. Traders are widening margins. If disruption moves from threat to fact, the price response will be swift. Yet markets are adaptive organisms. Tankers reroute. Refineries recalibrate. Diplomacy reemerges. Supply chains, though strained, are rarely static.