New Delhi, April 3 -- Financial markets are failing to fully price in the escalating risks emanating from the West Asia crisis, even as crude oil supply disruptions threaten to intensify, according to a recent Jefferies strategy note.

The report underscores a striking disconnect between geopolitical realities and market behaviour, noting that "the only way to explain why financial markets have not sold off more on the continuing "Middle East news flow is that investors' base case remains" limited escalation, ' an assumption that is increasingly being challenged by events on the ground.

Jefferies highlights that this complacency persists despite clear signs of intensification, including US military mobilisation and direct conflict dynami...