Cyril Widdershoven of OilPrice.com wrote that it's shocking that commodity traders and energy giants are ignoring the unfolding Middle East crisis. Here are their views:

Israel is on the verge of a full-scale invasion of the Gaza Strip, and its armed forces are preparing to implement a series of military strategies. While regional tension continues to escalate, a full-scale war involving Hezbollah and its supporters has yet to break out on Israel's northern borders with Lebanon and Syria.

Currently, diplomatic pressure from the US and Arab countries is preventing Hezbollah from launching a large-scale offensive. This ongoing “stalemate” is unstable because it has the potential to trigger regional conflict and cause serious instability in Arab countries such as Egypt, Jordan, and Saudi Arabia, which may face strong public opposition.

Although the oil and gas market is concerned about the ongoing conflict and its potential impact on energy supply and operations, oil price risk premium expectations remain relatively low.There seems to be great uncertainty about the situation, but even Saudi Crown Prince Mohammed bin Salman is holding FII meetings as usual, acting as if no crisis had occurred.

The energy industry leaders attending the conference gathered in the luxurious surroundings of the Ritz-Carlton, Riyadh, which seemed out of touch with local reality.

Just as Western political leaders often struggle to understand the sentiments of their constituents, leading to the rise of populism, energy giants, OPEC leaders, and commodity traders also seem to be out of touch with the unfolding crisis.

This situation is strikingly similar to Russia's military build-up on the Ukrainian border in 2022, when most people thought there would be no major incident.

From a military geopolitical perspective, the current alertness of Western forces, including the US and Israel, is unparalleled. While all eyes were on the IDF and its neighbors, America's large-scale military build-up in the region was hidden from public view.

The only obvious change in attitude is Washington's preparations to protect American civilians and diplomats from getting involved in the conflict.However, the hidden increase in the US Navy's projective capabilities, deployment of advanced anti-missile systems, fighter squadrons, and offensive capabilities against any regional opponent are unprecedented.

Officially, Washington attributed these military actions and preparations to protecting US military forces in the Middle East because of increasing attacks on US military assets by Iran-backed Iraqi and Syrian militants. It is clear, however, that its focus is not limited to protection by force.

Since Hamas launched an attack on Israel, US forces in the Middle East have been continuously attacked by missiles, drones, and rockets in Iraq and Syria, and even in the Red Sea region they have been attacked by missiles based in Yemen. All of these attacks are linked to actions supported by Iran.

Washington's recent call for American citizens to withdraw from Lebanon and other Arab capitals should not be ignored.There are clear signs thatDirect military confrontation between the US and Hezbollah, Syria, and Iran is imminent.The deployment of two US aircraft carriers off the coast of Israel, as well as the current deployment of the US fleet in and around the Arabia/Persian Gulf, underscores the seriousness of the situation. Israel's ground attack on Gaza or Hezbollah's increased activity in northern Israel could easily trigger a larger conflict.

Oil markets, commodity traders, investment funds, and shipping companies should quickly reassess their strategies.

While building a military delivery capability is generally a welcome defensive move, current actions suggest that the US is shifting from a defensive stance to an offensive stance.Unless a miracle occurs in the next few hours or days, a greater degree of volatility and confrontation than portrayed by mainstream media or analysts seems imminent.

Even an incident that causes American casualties, initiated by small actors such as Hezbollah or Iran-backed militias, could trigger a major crisis.Iran's military capabilities, particularly its missiles and proxy forces, are daunting, and the outcome of an all-out confrontation will be decisive.

In such a multi-faceted conflict,Its impact was extensive, including the Eastern Mediterranean, the Suez Canal, the Red Sea, and the Persian Gulf.

It is home to important maritime transport routes for energy, commodities, and nearly half of the world's maritime trade. The cost of such conflict will be staggering, jeopardizing future assessments and investments.

History offers valuable lessons, even for algorithm-based commodity traders and investors. The current situation is reminiscent of the crisis in Ukraine, but this time, the powers involved have greater capacity and influence. It is important not to underestimate Iran's global influence. In addition to its powerful navy and Revolutionary Guard Corps, Iran has influence all over the world, including the US, the UK, and the European Union. Furthermore, although Russia did not participate openly, it should not be overlooked as a silent presence in the development of events.

edit/ruby