Geopolitical tensions in the Middle East have intensified, with Iran launching attacks on Gulf oil infrastructure and threatening tech companies, while US-Israeli strikes continue to target Iran's regime. Despite these developments, crude oil prices remain subdued, failing to react strongly to the heightened risk environment. Meanwhile, the US CPI data came in at 2.4%, aligning with forecasts and offering limited directional bias for energy markets. The situation remains fragile, with Iran's threats to mine the Strait of Hormuz and Israel's escalation against Hezbollah in Beirut adding to regional volatility. For markets, the lack of a sharp oil price reaction suggests traders may be pricing in prolonged uncertainty rather than immediate supply disruptions. The Fed's response to the CPI data, which matches expectations, could influence broader risk sentiment. However, the persistent conflict in the Gulf and potential for further military escalation remain key overhangs for energy markets. Traders should monitor statements from US and Iranian officials for clues about de-escalation efforts. MENA investors face a dual challenge: geopolitical risks in the Gulf could disrupt regional trade flows, while global crude dynamics might impact local energy sectors. The Strait of Hormuz remains a critical focal point, with any mining or blockage threats likely to trigger sharp price swings. Near-term attention should also be on the Fed's policy trajectory and how it interacts with energy market volatility.

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