Glossary

Geopolitical Risk Premium

The part of a commodity's price, most often oil's, that pays for a supply disruption that has been threatened but has not happened. It builds on headlines and fades only on evidence, such as restored output or a ceasefire. After the Abqaiq attack of September 14, 2019, Brent rose 14.6% in a day and was back near $60 by the end of the month as Saudi output returned.