Daily Geo-Energy Intelligence Digest - August 13, 2026

1) EXECUTIVE RISK SNAPSHOT

• Regime: Low risk tone maintained despite elevated geopolitical tensions.


• Contagion Status: Moderate contagion potential, driven by concentrated war-related alerts in North Africa, Middle East, and Europe. Regional conflicts show signs of spillover but limited immediate systemic escalation.

2) FULL INDEX DECOMPOSITION

• GERI (Global Energy Risk Index): 19 (+4) — Moderate increase, reflecting heightened war-related alerts but tempered by stable market prices.


• EERI (Energy Event Risk Index): 35 (+16) — Sharp rise driven by multiple high-severity war and energy infrastructure attack alerts, particularly Libya and Saudi Arabia.


• EGSI-M (Energy Geopolitical Stress Index - Monthly): 12.25 — Elevated but stable, indicating sustained geopolitical tension without immediate escalation.

3) MULTI-REGION SPILLOVER ANALYSIS

• North Africa to Europe: Refinery attacks in Libya and diesel supply crunch in Europe indicate direct energy supply risk spillover, pressuring European diesel markets.


• Middle East to Global: Saudi Aramco refinery strike and Houthi threats increase Middle East risk premium, influencing global oil price volatility and tanker rates.


• Russia to Europe: Limited data on Russian missile launches and Caspian tensions add uncertainty but have not triggered broad market risk repricing.


• Black Sea: Record oil tanker rates due to drone attacks reflect logistical bottlenecks, potentially impacting European and Asian crude flows.

4) CROSS-ASSET SENSITIVITY DASHBOARD

| Asset | Move (%) | Sensitivity to War Risk (Beta) | Interpretation |
|-------------|----------|-------------------------------|--------------------------------|
| Brent Crude | -1.08% | Moderate (0.5) | Price dip despite attacks suggests supply concerns offset by demand or inventory factors.
| TTF Gas | -2.35% | Low (-0.3) | Gas prices easing, possibly due to improved storage (+0.6%) and mild weather.
| VIX | -0.73% | Low (-0.2) | Implied volatility decreasing, indicating market calm despite geopolitical alerts.
| EUR/USD | -0.02% | Neutral (0.0) | FX stable, no significant risk-driven moves.
| EU Gas Storage | +0.60% | Negative correlation (-0.4) | Rising storage reduces near-term gas supply risk.

5) DIVERGENCE ANALYSIS

• Risk Signal vs Market Pricing: Elevated war risk alerts (EERI +16) contrast with declining Brent and TTF prices and lower VIX, suggesting market is pricing in resilience or offsetting factors such as inventory buffers and demand concerns.


• Potential Underpricing of War Risk: Given multiple 5/5 war alerts, current energy prices may understate near-term supply disruption risk, especially diesel markets in Europe.

6) REGIME CLASSIFICATION + TRANSITION PROBABILITY

• Current Regime: Low risk, stable market regime with elevated geopolitical tension.


• Transition Probability:

- To Medium Risk: 35% within 1-2 weeks if refinery attacks escalate or new strikes occur in key chokepoints (Libya, Saudi Arabia).
- To High Risk: <10% short term, contingent on escalation in Caspian or Black Sea regions or major supply disruptions.

7) SECTOR IMPACT FORECAST

• Power: Limited immediate impact; gas price easing supports stable power generation costs.


• Industrial: Diesel supply crunch in Europe may increase industrial fuel costs and logistics expenses.


• LNG: Stable to slightly bearish; EU gas storage rise and TTF price decline reduce short-term LNG demand pressure.


• Storage: Positive; increased EU gas storage provides buffer against supply shocks.

8) PROBABILITY FORECASTS

• Refinery Attack Escalation (Libya, Saudi Arabia): 40% probability in next 10 days, driven by repeated drone strikes and ongoing conflict.


• Black Sea Logistic Disruption Persistence: 30% probability, linked to continued drone attacks and tanker rate surges.


• Russian Missile Campaign Intensification: 25% probability; data limitations obscure full risk but monitoring needed.

9) SCENARIO FORECASTS

• Scenario 1 (Base Case): Continued low risk regime; isolated attacks contained; Brent stabilizes near $88; diesel supply tightness persists but manageable.


• Scenario 2 (Medium Risk): Refinery attacks escalate, causing temporary Brent spike to $95+; European diesel shortages deepen; LNG demand stable; market volatility rises.


• Scenario 3 (High Risk): Regional conflict expands (Caspian, Black Sea); major supply disruptions; Brent surges above $100; gas prices spike; VIX rises sharply; energy markets volatile.

10) CUSTOM WATCHLIST

• Libya Refinery Status: Monitor attack frequency and repair timelines.


• Saudi Aramco Refinery Operations: Track outage duration and security developments.


• Black Sea Tanker Rates: Watch for sustained rate spikes indicating logistic bottlenecks.


• EU Gas Storage Levels: Weekly updates to assess supply buffer.


• Russian Military Activity Data: Watch for intelligence updates on missile launch patterns.

11) STRATEGIC INTERPRETATION

Despite a low overall risk tone, the energy sector faces concentrated geopolitical threats primarily from Middle East and North Africa conflicts. The sharp rise in event risk (EERI +16) contrasts with subdued market volatility and declining energy prices, signaling a potential disconnect. Traders should be alert to refining sector vulnerabilities, particularly diesel supply in Europe, and monitor Black Sea shipping disruptions that could constrain crude flows. The probability of escalation remains moderate, with key triggers including further refinery attacks or expanded conflict zones. Hedging strategies may consider diesel market exposure and geopolitical risk premiums in crude pricing.

Informational only. Not financial advice.