Oil Market Risk Premium Declines as U.S.-Iran Conflict Eases
Crude prices have begun to fall as traders reduce the geopolitical risk premium. Physical supply chains, however, continue to operate below pre-conflict levels.
foxbusiness.com-Iran conflict is moving toward conclusion. Crude prices declined as traders unwound long positions and volatility sellers returned. ZeroHedge reported that March and April together saw roughly 246 million barrels drawn from global inventories. 4 million barrels per day below pre-war levels.
Reopening the Strait of Hormuz does not immediately restore normal supply flows. Tankers must be repositioned, export schedules rebuilt, and insurance markets require renewed confidence in transit security. The article noted that vessel traffic is unlikely to return to pre-conflict patterns immediately.
Elevated insurance premiums and cautious security assessments are expected to persist for weeks after any formal ceasefire.
Asia are examining supply options that avoid the Strait of Hormuz. Canada's emerging Pacific LNG corridor is cited as one route under consideration. The piece stated that the shift from efficiency to resilience could become a structural driver of oil and LNG demand over the next decade.
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