① Investors are concerned about the market impact of the attack on Iran, with threats to the oil market and energy supply. Iran produces 3.3 million barrels of crude oil per day, accounting for 3% of global production, and is located near the Strait of Hormuz, which affects one-fifth of global crude oil transportation; ② Geopolitical conflicts may push up the stock prices of energy producers and defense companies, gold prices may rise further, and U.S. Treasury bond prices may increase. The stock market may fall in the short term, but a long-term negative reaction is not inevitable.
Cailian Press, March 1 (Editor Huang Junzhi) Investors are closely monitoring the potential market impact of the attack on Iran over the weekend. In particular, the potential threats to the oil market and energy supply have drawn significant attention.
The Islamic Republic of Iran produces approximately 3.3 million barrels of crude oil per day, accounting for 3% of global production and making it the fourth-largest oil producer in OPEC. However, due to its strategic geographic location, the country’s influence on global energy supply far exceeds its production scale. Iran is located along the Strait of Hormuz, through which about one-fifth of the world's crude oil is transported, primarily from key suppliers such as Saudi Arabia and Iraq.
According to real-time data from the international tanker traffic monitoring system, the sailing speed of tankers in the waters surrounding the Strait of Hormuz has generally dropped to zero, indicating that shipping in the region has come to a standstill. Additionally, media tracking data shows that although the strait remains open, some tankers have chosen to reroute after the attack, leading to congestion on both sides of the strait’s entrance.
Igniting the Oil Market
The oil market is temporarily without real-time trading data due to the weekend closure. However, analysts at Barclays wrote on Saturday: "The oil market may have to face the worst-case scenario on Monday. Based on the current situation, we believe Brent crude prices could reach $100 per barrel. The potential impact on the oil market cannot be overstated."
The bank stated that investors should expect oil prices to test the $100 per barrel level on Monday, implying an approximate 35% upside. International crude prices, after plummeting last year, have steadily rebounded in 2026.$Brent Last Day Financial Futures (MAY6) (BZmain.US)$ Prices have risen by 20% so far this year.
Jorge Leon, head of geopolitical analysis at Rystad Energy, stated: “If there are no signs of de-escalation over the weekend, risk premiums may drive Brent crude prices up by $10 to $20 per barrel on Monday.”
“How Tehran responds within the next 24 to 72 hours—especially regarding energy infrastructure or regional shipping—will be the primary driver of near-term dynamics in the oil market,” he added.
On the other hand, a rapid increase in energy prices could also push up inflation expectations, potentially putting pressure on business activities and consumer spending.
Deutsche Bank also wrote in its latest report: 'A positive supply shock in oil prices will have a significant impact on inflation expectations and inflation risks,' adding that the oil shock is one of the main risks facing its economic outlook for 2026.
Goldman Sachs analysts had previously predicted that a serious conflict with Iran would pose a major adverse impact on the economy, with the risk of recession 'sharply rising.' Following the attack on Iran's nuclear facilities last summer, Goldman Sachs stated that if Iran were to blockade the Strait of Hormuz for an extended period, its worst-case scenario forecast was for Brent crude prices to soar to $110 per barrel.
Defense and energy stocks may rise
Based on experience, past conflicts that threatened oil supplies have led to short-term increases in the stock prices of energy producers while also boosting defense stocks.
So far this year,$Ishares Trust U.S. Aerospace & Defense Etf (ITA.US)$It has risen nearly 14% so far this year. The ETF surged immediately following the attack on Venezuela, and as tensions over the war between the United States and Iran have escalated this month, the ETF has once again become 'restless.'
At the same time,$Ishares Global Energy Etf (IXC.US)$It has steadily climbed since the beginning of this year, with gains reaching 24%, as the market has been focusing on the potential impact of various conflicts on global supply.
Impact on various assets
Over the past year, geopolitical conflicts have been one of the factors driving gold prices above $5,000 per ounce, and the confrontation with Iran could become a new catalyst for further increases in gold prices. At the same time, a general rise in market risk aversion may push up U.S. Treasury prices, thereby depressing yields.
Although stock markets may decline as investors digest the news, a prolonged negative reaction is not inevitable. The impact of geopolitical events on stock markets is often fleeting, and markets may rebound even if armed conflicts continue.
"If any gains in the S&P 500 Energy sector on Monday morning fade by the afternoon, we would not be surprised. Similarly, if any sell-off in the S&P 500 Index on Monday morning turns into a rebound, we would not be surprised either," veteran Wall Street analyst and founder of investment advisory firm Yardeni Research, Ed Yardeni, said on Saturday.
Nevertheless, analysts at Barclays reminded investors not to be overly optimistic that the latest conflict between the U.S. and Iran will be a controllable, short-lived event, nor should they rush to buy the dip.
"A war lasting more than a few days — and catching investors off guard when it breaks out — should trigger a more pronounced negative reaction. We advise against immediately buying on dips in stock prices — the risk-reward ratio does not seem appealing," the analysts wrote. "If the stock market corrects to a certain extent (for example, if the S&P 500 falls more than 10%), there might be a good buying opportunity. But now is not the time."
Editor/Jayden
