Senior Portfolio Managers James Mick and Brian Kessens discuss how rising geopolitical tensions are impacting energy markets.
- Heightened volatility: Oil prices are reacting quickly to geopolitical headlines and uncertainty.
- Risk premium emerging: Markets may begin pricing in a geopolitical risk premium for oil.
- Strait of Hormuz disruption: Any sustained closure could significantly tighten global oil supply.
- U.S. advantage: Low domestic natural gas prices may benefit U.S. refiners and petrochemical producers.
- Strategic reserves help—but briefly: Emergency releases can ease supply shocks, but only temporarily.
- Duration matters most: The length of the disruption will ultimately determine market impact.
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