While global energy markets are not yet pricing in worst-case scenarios for the Israel-Iran war, oil tanker rates are providing a good real-time gauge of the escalating risks.

Despite heightened tensions between Israel and Iran and resulting market speculation, oil supply from the Middle East remains largely unaffected, with the critical Strait of Hormuz staying open for navigation.

Oil prices rallied over 7% today after Israeli airstrikes on Iran. This elevated geopolitical uncertainty and requires the oil market to price in a larger risk premium for supply disruption.