Brent Crude Risk Premium Held High Amid Geopolitical Tensions

The Brent crude oil market is holding onto an elevated risk premium due to ongoing geopolitical tensions, according to a recent analysis by ING. While there have been no significant physical supply losses, the threat of escalation keeps prices supported.

The risk premium stems from the persistent geopolitical environment, particularly around key shipping lanes and major producing regions. ING analysts highlight that the market is pricing in a higher likelihood of supply disruptions, despite limited actual outages so far.

Recent attacks on tanker routes and drone strikes on energy infrastructure have heightened fears of supply bottlenecks. While these incidents have not yet led to sustained losses, the market remains on edge, with any further escalation likely to push prices higher.