In the global oil sector, there's risk… and then there's risk.
One is a quasi-artificial construct traders use to manufacture returns in a shaky market.
The "other" risk is all too real – and as we've seen in the images of burning oil tankers – very visceral. This risk is expensive and often deadly; it takes the form of bullets, missiles, torpedoes, limpet mines, armies on the move, and cutthroat Middle Eastern power politics.
The latest attacks on two oil product tankers just south of the highly strategic Strait of Hormuz once again puts this kind of risk at center stage in the oil market.
And unlike previous attacks (yes, there have been many others), this most recent is far more consequential.
About the Author
Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.