Global Energy Risk Index (GERI)Updating Daily

The surge in risk is being driven primarily by the rapid escalation of hostilities in the Middle East, with Iran’s strikes on two UAE tankers in the Strait of Hormuz dramatically increasing the likelihood of supply interruptions. This critical waterway, through which roughly a fifth of global oil passes, is now effectively a conflict zone. The situation has prompted Asian oil importers to pivot urgently toward U.S. supplies, signaling both a diversification effort and a scramble to secure cargoes as shipping through Hormuz stalls. The knock-on effects are global: Pakistan’s emergency LNG procurement underscores how quickly regional disruptions can trigger energy insecurity far afield, especially for nations dependent on seaborne energy flows. The intensification of US-Iran hostilities further complicates the outlook, raising the risk of broader regional escalation and additional market shocks.

Looking ahead, market participants should closely monitor the operational status of the Strait of Hormuz and the potential for retaliatory or preemptive actions by regional and global actors. Any sustained disruption could send prices significantly higher and tighten physical markets, particularly if Asian buyers continue to compete aggressively for Atlantic basin cargoes. Key scenarios to watch include potential diplomatic interventions, escalation to direct confrontation between major powers, and the resilience of alternative supply routes. Energy firms and import-dependent economies should revisit contingency plans, ensure diversified sourcing, and prepare for extended periods of price volatility.