The fallout from war between the United States, Israel and Iran has dominated global oil markets. And not just because the Strait of Hormuz, which normally carries about 20% of global oil and gas, remains effectively closed to shipping traffic.
Deep uncertainty about how long the disruption will continue has added a persistent “risk premium” – an extra cost built into oil prices to account for the risk of disrupted supply.
Rising insurance costs, reduced ship traffic and longer transit routes avoiding the Middle East have all added further friction to global oil supply chains.
