The widening risk premium may lead to long-term high oil prices.

Iran warns it will "reserve all options" in response to US attacks, which could exacerbate concerns in the market about the potential disruption of shipping in the Strait of Hormuz. As a key passage for transporting 20% of the world's oil and liquefied natural gas, any disruption in the strait could trigger a chain reaction. Iranian Foreign Minister Abbas Araghchi stated on X platform that US bombing of Iran's Fordo, Natanz, and Isfahan nuclear facilities would have "permanent consequences." The continued expansion of the crude oil risk premium could push oil prices higher in the long term, reigniting concerns about inflation in the market. All of this could intensify price volatility in various asset markets and weaken market expectations for a rate cut by the Fed in the second half of the year. Additionally, Israel's attack on Iran's South Pars gas field on June 14 further increases the risk to oil and gas supply in the Middle East region.