Oil markets have reacted strongly to recent geopolitical developments in the Middle East, notably reports of an Iranian attack on a US warship. This incident has heightened fears of supply disruptions, driving crude prices higher during the European trading session. Traders should anticipate continued volatility as the situation evolves, with potential impacts on energy supply routes and global oil exports. Risk premiums are likely to remain elevated, making oil-related instruments, including the Canadian dollar, sensitive to further geopolitical news.