Geopolitical risk has spiked further. Following unprecedented military action, the Strait of Hormuz, a critical choke point handling 20% of the world's daily oil and LNG, is effectively paralysed.

With the geopolitical risk premium on oil already sitting between $20 and $30 per barrel, fears are mounting that a prolonged disruption could push prices past $100. This threatens to trigger a new wave of global inflation and force central banks to abandon their rate-cutting cycles.

Cedric Chehab, Chief Economist at BMI, joins BFM to unpack the macroeconomic fallout of the crisis, the US strategy of "regime reconfiguration" in Iran, and what this energy shock means for highly exposed economies in ASEAN.

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The $30 Risk Premium: Why BMI estimates the "fair value" of oil is currently $55 to $65, and how panic buying and supply disruptions could drive prices even higher.
"Regime Reconfiguration" vs. Regime Change: Unpacking the US strategy in Iran, the search for a moderate transitional government, and the severe risks of sectarian conflict if the plan fails.
The Supply Squeeze: Why the global capacity to offset physical supply losses from the Strait of Hormuz is extremely limited, despite OPEC+ signals and US production.
The Central Bank Dilemma: How a sustained oil shock could kill hopes for monetary easing, forcing central banks to adopt hawkish forward guidance or aggressively raise rates to anchor inflation expectations.
The ASEAN "Triple Whammy": Why Southeast Asia is highly vulnerable to this crisis, facing deteriorating terms of trade, current account hits, and massive strain on government fiscal accounts due to energy subsidies.

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