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The market is less reactive to gepolitical threads than it used to be
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Oil traders focus on fundamentals, not geopolitics

Tolerance for perceived political risk has expanded, but such complacency could be dangerous

Gone are the days when a single incident involving an oil tanker carrying Saudi Arabian or other Mid-East Gulf crude could send oil prices soaring. Attacks on Saudi oil facilities have become an almost monthly affair recently, with minimal price impact. The market has become substantially more inured to geopolitical threats, after a year where the demand impact of global lockdowns has dominated traders’ thoughts. Largely positive developments such as the Abraham Accords and nuclear talks with Iran have added to a confidence that political risk is not a market-mover. But the consequences if these assumptions prove optimistic could be explosive. Oil markets have become less efficient in abso



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