The crude oil market spent weeks pulling geopolitical risk out of the price and two tanker attacks near the Strait of Hormuz just put it back in. A Saudi-flagged crude oil tanker and a Qatari liquefied natural gas carrier both took damage in the same stretch of water on the same morning, with reports pointing to Iranian Revolutionary Guard missiles fired overnight. The market had been trading as if the diplomatic process was making the shipping lanes safe again. Tuesday proved it is not. The safe-passage provisions in the interim agreement did not stop either attack, and with Washington and Tehran moving further apart instead of closer together, the question for crude traders is no longer whether the risk premium belongs in the price but how much of it the market removed too early.
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