Key Moments
- Oil prices remained largely unchanged following the latest escalation between Israel and Iran, with markets reverting to an “as you were” stance.
- Rabobank’s Michael Every stresses that decisions by Hezbollah and Iran will be pivotal for the eventual course of the conflict and its impact on energy markets and broader risk sentiment.
- Developments involving Yemen’s Houthis, Red Sea shipping, and sanctions on Iran’s Navy are underscored as keeping the crisis unresolved and war-risk pricing in focus.
Rabobank View: War-Risk Premium Holding Steady
Rabobank Global Strategist Michael Every observes that oil prices have shown little reaction after the latest sharp flare-up in the Middle East involving Israel and Iran. According to Every, markets have effectively returned to an “as you were” posture, with crude and related asset classes seeing limited follow-through despite the renewed geopolitical shock.
Every emphasizes that the trajectory of the conflict – in particular the role of Hezbollah and the decisions taken by Iran – will be central in determining the future direction of energy prices as well as broader market sentiment.
Market Behavior and Conflict Dynamics
Every characterizes the recent market response as a repetition of prior patterns, even amid significant geopolitical developments. He notes:
“After yet another Middle East rollercoaster for markets it’s now ‘as you were’, with oil –so everything else– little changed.”
He links this apparent calm in pricing to deeper structural implications, adding:
“That dynamic has huge implications for when and how this war ends, so for energy, so for markets.”
Risks to Shipping and Energy Flows
The strategist also points to developments away from the immediate Israel-Iran theater that could affect energy logistics and risk premia. He notes that Yemen’s Houthis have claimed they will resume a maritime blockade of Israel in the Red Sea, recalling that their previous effort had a much wider practical impact.
Every highlights that such actions have the potential to disrupt both cargo and energy transport routes. He underscores that this is occurring as a US Navy F-18 has struck and disabled an oil tanker in the Gulf of Oman, and as the European Union has imposed sanctions on Iran’s Navy.
| Geopolitical Factor | Potential Market Impact |
|---|---|
| Israel-Iran escalation | Maintains war-risk premium while oil prices remain little changed |
| Hezbollah and Iranian decisions | Key to the future path of the conflict, energy prices, and sentiment |
| Houthis’ claimed Red Sea blockade | Threatens cargo and energy flows via critical maritime routes |
| US F-18 strike on tanker in Gulf of Oman | Reinforces concerns over security of energy shipments |
| EU sanctions on Iran’s Navy | Adds further strain to regional tensions and shipping risk |
Political Signals and Ongoing Uncertainty
Despite the muted price reaction, Every stresses that the situation remains unresolved. He writes:
“In the background, Yemen’s Houthis claim they will restart a maritime blockade of Israel in the Red Sea, which was applied far more broadly the last time they put it in place.”
“Obviously, that can threaten cargo and energy flows at this juncture, as a US Navy F-18 struck and disabled an oil tanker in the Gulf of Oman and the EU hit Iran’s Navy… with sanctions.”
He concludes that the crisis is still unfolding, referencing political commentary on possible negotiations and outcomes:
“In short, this crisis is far from over, even as Trump says “total victory” will be declared in the next two weeks as Iranian negotiators are “willing to give us everything,” and VP Vance added that the deal being discussed was “a home run” for the US.”
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