Investors have warned that markets are underpricing Iran war risks as oil prices continue to fluctuate around a four-year high due to renewed fears about the U.S.-Iran war. The global benchmark Brent crude futures hit a four year high and rattled equity markets on Thursday, with Brent futures for June delivery falling 1.7% at $116.05 a barrel and West Texas Intermediate futures trading at $106.59 respectively. The news of the impending military action against Iran led to a significant increase in oil prices, with Axios reporting that the US. Central Command is preparing to present President Donald Trump with plans for further military action. However, analysts believe investors are still pricing for peace and underestimating potential future risk. Since the start of the Iran war in February, the oil market has been in a state of backwardation, where futures with near-term deliveries are marketed at a premium over longer-dated contracts, indicating that money markets are pricing in a resolution to the conflict. Patrick Armstrong, chief investment officer at Plurimi Group, warned that front-month futures could go a lot higher in the near term, and warned that investors may not be fully pricing the longer-term impact of the war. He also warned that the sharp backwardation could impact the global economy's impact on refined product prices.