Oil supply risk premium builds on Middle East shipping threats

Demand thesis

rising

Why underpricing possible

partially recognized

Evidence

• Oil tanker rates reach record highs on surging risks to Middle East shipping
• Chevron CEO: Oil price buffers are 'played out' as risks from Iran war increase
• Oil rises on Saudi pipeline attack, Hormuz supply risks

Risks

• Geopolitical de-escalation could quickly reverse risk premium; demand destruction from high prices.

Potential beneficiaries

Best currently accessible expressions

Portfolio action

HOLDING

Invalidation

• If oil prices fall below recent levels or shipping risk headlines subside.