Anoop Singh: Energy shipping costs are increasing due to perceived risk

Geopolitical Risk & Energy Prices - Rising tensions due to Israel targeting Iran's missile production sites are causing concerns about shipping disruptions in the Persian Gulf and Strait of Hormuz, leading to increased oil and natural gas prices [1] - Even if shipping lanes remain open, energy prices may still rise due to increased shipping costs related to perceived risk and risk premiums [2] - Shipping costs from the Middle East Gulf to China for super tankers have increased from $140 per barrel of oil moved [5] - News flow, especially aggressive rhetoric from the US, significantly impacts shipping costs [7] - GPS signal jamming in the Strait of Hormuz poses a risk to smooth transport [8][9] Shipping Market Dynamics - Ship owners are considering the possibility of ships being locked up, demanding a premium reflecting risk [4] - The market has caps on how much it will pay for shipping [6] - A two-week pause initiated by the US government for negotiation has eased the temperature, reflected in oil markets [7] - Heightened risk levels persist in the Gulf and Strait of Hormuz, hindering smooth transport [8] - Potential incidents like mines or kinetic events could significantly increase shipping costs [10][12] Insurance & War Risk - Insurance premiums haven't significantly increased as the region isn't declared an active war zone by the Joint War Committee, but this could change with incidents like mines [12][13]