Markets are still underpricing Iran war risks, investors warn as oil fluctuates around four-year high

Renewed fears about the trajectory of the U.S.-Iran war sent global benchmark Brent crude futures to a four-year high and rattled equity markets on Thursday — but analysts say investors are still pricing for peace and underestimating potential future risk. The latest step higher in oil prices came after Axios reported that U.S. Central Command is preparing to present U.S. President Donald Trump with plans for further possible military action against Iran, citing anonymous sources. The president was also reported to have rejected a peace proposal from Tehran, which would mean an American blockade of the Strait of Hormuz — a critical oil shipping route — will remain in place. By 6:06 a.m. ET, Brent futures for June delivery fell 1.7% at $116.05 a barrel, climbing down from an earlier surge that put the contracts on track for their highest close since March 2022. U.S. West Texas Intermediate futures for June delivery were down about 0.2% to trade at $106.59, also paring earlier gains. @LCO.1 @CL.1 1D line Oil futures The fresh volatility on Thursday raised questions about what comes next for the oil market and the global economy. "This move in the oil price might be the catalyst to see sentiment and longer-term positioning changing," Neil Birrell, chief investment officer at London-based Premier Miton Investors, told CNBC in an email on Thursday. …