Daily Geo-Energy Intelligence Digest - July 13, 2026

1) EXECUTIVE RISK SNAPSHOT

• Risk Tone: Low, stable from prior day


• Regime: No defined regime currently active; risk environment steady despite geopolitical tensions


• Contagion Status: Elevated war-related alerts in Europe and Middle East, but limited spillover to broader markets as VIX declined slightly

2) FULL INDEX DECOMPOSITION

• GERI (Geopolitical Energy Risk Index): 16 (unchanged)


• EERI (Energy Event Risk Index): 21 (+12) — sharp increase driven by multiple high-impact war and energy supply alerts


• EGSI-M (Energy Geopolitical Sentiment Index - Monthly): 7.81 — steady, reflecting ongoing tension but no escalation to crisis level

Attribution:

• War-related events in Europe (Ukraine-Russia conflict escalation) and Middle East (Iran-related strikes) primarily drove EERI spike.


• OPEC output hitting a 36-year low due to Iran war impact is a key energy supply-side driver.


• GERI stability suggests geopolitical risk perception not yet translating into broad market panic.

3) MULTI-REGION SPILLOVER ANALYSIS

• Europe: High localized risk from Ukraine-Russia conflict, energy infrastructure attacks, and grain export disruptions.


• Middle East: Elevated risk from Iran-related missile strikes and US retaliatory actions, impacting Gulf supply routes.


• Cross-Region: War risk in Middle East is amplifying energy supply concerns in Europe, especially given OPEC output cuts.


• Spillover: Limited contagion to global financial markets (VIX down), indicating market confidence in containment or offsetting factors.

4) CROSS-ASSET SENSITIVITY DASHBOARD

| Asset | Price | Change (%) | Sensitivity to War Risk | Interpretation |
|-------------|----------|------------|-------------------------|---------------------------------|
| Brent Crude | 78.53 | +4.40% | High | Supply concerns from OPEC cuts + conflict-driven premium |
| TTF Gas | 49.65 | +1.74% | Moderate | European supply risk from Ukraine conflict and storage levels |
| VIX | 15.03 | -0.81% | Low | Market volatility subdued despite geopolitical events |
| EUR/USD | 1.1419 | -0.02% | Low | Currency stable, minor risk impact |
| EU Gas Storage | 52.2% | +0.40% | Low | Slight build supports price moderation |

5) DIVERGENCE ANALYSIS

• Risk Signal vs Market Pricing:

- EERI surged +12 points, signaling heightened event risk, yet VIX declined and EUR/USD stable, indicating markets are not pricing in a full risk premium.
- Brent crude’s +4.4% rise aligns with supply concerns but does not reflect extreme risk pricing.

• Interpretation: Market may be discounting risk due to expectations of limited escalation or effective conflict containment.

6) REGIME CLASSIFICATION + TRANSITION PROBABILITY

• Current regime: Low risk, no active regime classification.


• Transition probability to medium risk regime within next 7 days: ~30%, driven by potential escalation in Ukraine conflict or Middle East strikes.


• Probability of regime escalation to high risk: <10%, contingent on further OPEC cuts or major infrastructure damage.

7) SECTOR IMPACT FORECAST

• Power: Moderate upward pressure on prices due to gas supply concerns in Europe.


• Industrial: Potential cost inflation from energy price rises; watch for supply chain disruptions in grain exports.


• LNG: Increased demand from Europe for alternative supplies as pipeline risks rise.


• Storage: Slight build in EU gas storage (+0.4%) offers some buffer but remains a key watch indicator.

8) PROBABILITY FORECASTS WITH DRIVER ATTRIBUTION

| Scenario | Probability | Key Drivers | Portfolio Impact |
|---------------------------|-------------|----------------------------------------------|--------------------------------|
| Continued Low Risk | 60% | Stable conflict, no major escalation | Stable prices, moderate volatility |
| Medium Risk Escalation | 30% | Increased strikes on energy infrastructure, OPEC further cuts | Price spikes, volatility rises |
| High Risk Crisis | 10% | Major escalation in Ukraine/Middle East, blockade of supply routes | Sharp price surge, market turmoil |

9) SCENARIO FORECASTS

• Base Case (60%): Conflict remains contained; Brent stabilizes near $78-$80; gas prices mildly elevated; markets calm.


• Escalation Case (30%): Renewed missile/drone attacks disrupt key ports and pipelines; Brent spikes above $85; TTF gas rises above $55; volatility increases.


• Crisis Case (10%): Full-scale disruption of Gulf supply; OPEC output further constrained; Brent breaches $90; sharp market selloff; risk aversion spikes.

10) CUSTOM WATCHLIST

• Ukraine grain port security status (weekly updates)


• OPEC production announcements and Iran war developments


• EU gas storage trajectory (target >55% to ease price pressure)


• US-Iran military engagement indicators


• Brent crude price movements around $80 resistance level

11) STRATEGIC INTERPRETATION

Despite a surge in energy event risk (EERI +12), overall geopolitical risk perception remains contained (GERI stable), reflecting market confidence in limited escalation. Brent crude’s 4.4% gain confirms supply concerns, primarily from OPEC output cuts and conflict-driven disruptions in Europe and the Middle East. European gas prices are moderately elevated but supported by incremental storage builds, tempering price spikes. Volatility indices and currency markets show muted responses, signaling a market discounting of worst-case scenarios. However, the probability of regime transition to medium risk is non-negligible (30%), warranting close monitoring of conflict developments and OPEC supply actions. Traders should watch key energy infrastructure and storage metrics for early signals of risk materialization or containment.

---

Informational only. Not financial advice.