
The latest escalation in the Middle East - marked by coordinated US‑Israel strikes on Iran and an unprecedented wave of Iranian retaliation at Israel and US bases in the region - has put geopolitical risk into heightened focus once again.
Oil prices had already hit a seven-month high in February on rising US-Iran tensions. Although Iranian Supreme Leader Khamenei was reportedly killed, the conflict is set to endure with Trump saying that the bombing “will continue, uninterrupted throughout the week, or as long as necessary”. With the confrontation posing an existential threat to Iran, the current episode would be keenly watched for any development with significant implications for the Middle East, energy markets, safe‑haven flows, and risk assets.
What does an extended US–Iran confrontation mean for markets, and how should investors position their portfolios?