Geopolitical Risk & Oil Market Impact - Oil prices initially surged by 10% following Israel's strikes on Iranian nuclear sites, indicating a risk premium situation where prices exceeded fundamental values [1] - The market's reaction, with an initial jump of almost 6% that later reduced to 13%, suggests that the absence of disruption to oil flows is a key factor [2] - The market is closely monitoring Iran's potential response, including possible actions against ships connected to the US, Israel, or Western allies in the Strait of Hormuz [4] - The evaporation of the risk premium is likely until a significant response from Iran occurs [5] Strait of Hormuz & Oil Trade Disruption - The potential closure of the Strait of Hormuz, though not solely decided by the Iranian parliament, remains a concern [3] - Some supertankers have been observed making U-turns near the Strait of Hormuz, signaling potential risk aversion among shippers [5] - Diversions of ships are currently infrequent, but the market is closely analyzing any indications of changes in oil flows [7][8] - Unlike the Red Sea situation, the Strait of Hormuz is crucial for accessing certain oil and LNG shipping ports, making it irreplaceable [8] - A significant avoidance of the Strait of Hormuz by ships would materially impact the amount of oil and gas on the water [9]