In our strategy for this year 2026 (January 2026 analysis note) we defined three structural drivers that, in our view, will move the markets this year: inflation, the spread of artificial intelligence and liquidity. Any geopolitical event will need to be analysed on the basis of how it might alter these three axes. We will not, therefore, offer geopolitical or ideological assessments; instead, we will focus on answering whether the conflict has the capacity to change the macroeconomic situation. With the information available at this time, our view is that, for now, it does not.
The market’s real focus is not the conflict itself, but its possible impact on oil, particularly because of the role of the Strait of Hormuz, through which approximately 20% of the world’s crude oil passes, and Iran’s attacks on oil- and gas-producing countries. A sustained disruption to transit could indeed generate a macroeconomic shock. That said, at this stage it is not the central scenario.
It is worth remembering that Iran produces below its capacity because of international sanctions and that it exports mainly to China. The determining variable will be OPEC’s response and the spare capacity existing in the system, and for this reason an attack on producing countries such as the Emirates, Qatar or Saudi Arabia could become relevant. Historically, when oil rises abruptly, major producers tend to adjust supply if they perceive a risk of demand destruction. It should also be borne in mind that Russian supply outside official channels (shadow fleet) continues to exist, which acts as a partial cushion. What we are observing for now, therefore, is a rise in the price of oil in response to instability, a temporary geopolitical premium, not a structural supply shock.
Recent experience shows us a clear pattern. The market penalises heavily when oil ends up generating structural inflation and forces central banks to change monetary policy.
This was the case in 2022, when the energy shock resulting from Russia’s invasion of Ukraine fed through into an inflationary environment and forced aggressive rate hikes. By contrast, in shorter episodes (1990, 2003 or 2019), volatility was intense but limited in time. It should also be borne in mind that in 2022 it was the demand side (Europe/US) that restricted its own access to Russian supply through sanctions. Now, demand is not seeking to reduce supply.
At a technical level, there are three relevant zones to watch:
- Below $90 a barrel, the macro impact is limited.
- Between $90 and $110, there is noise and a possible brake on disinflation.
- Above $110 on a sustained basis, we would indeed be talking about a real risk of inflationary reacceleration.
At this moment we are not in the third scenario.
The conflict only changes our strategy if it alters the inflation trajectory.
The direct weight of energy in the US and European CPI is limited, but the indirect effect can be amplified via transport, logistics and food. However, for this to feed through significantly into the CPI, the shock needs to be persistent over time. A one-off spike in crude does not change the path of monetary policy. A sustained increase does.
Today, the market remains more focused on rate expectations, the dynamics of corporate earnings and liquidity conditions than on a regional conflict, as long as it does not escalate on the energy front.
The conflict’s escalation potential
Although we have been surprised that Iran has attacked the countries of the Persian Gulf, we do not believe Iran has the capacity to sustain a prolonged, high-intensity conflict against Israel, the US and its neighbours. In this context, we think three factors in particular need to be monitored: the real damage to energy infrastructure (for example in Qatar, the UAE or Saudi Arabia), the direct and sustained involvement of the United States, and the coordinated response (or lack thereof) from OPEC.
Our central scenario at this stage is one of a contained conflict limited in time. We also think the Trump administration cannot afford sustained American military casualties at the same time as a long-lasting rise in the price of oil. The midterm elections take place in the autumn, and their outcome will determine whether Trump can continue governing comfortably or not. In this context, it cannot be ruled out that the United States itself will use its strategic petroleum reserve to keep prices low and be more inclined to negotiate depending on the virulence of Iran’s actions.
What are the possible implications for the investment portfolio?
In the base scenario of a short conflict, we expect short-term volatility, of course. Markets will probably overreact in the first days of the conflict in line with the news as it emerges. In portfolios where ETFs can be included, it may make sense (given their agility) to recommend some hedge or a discounted purchase. In portfolios made up solely of investment funds, if the base scenario holds and in the short term “we see solutions” (that is, Israel and the US prevailing), we think it does not make sense to move too much. At this stage we do not see structural macroeconomic changes. Corrections could become tactical opportunities.
What is Plan B? In an adverse scenario (to which we currently assign a low probability but one that could have a high impact), if oil were to exceed and sustain critical levels, we could recommend reducing duration in fixed income, reducing equity allocations, increasing tactical exposure to the energy sector and reinforcing assets that protect against inflation.
In conclusion, with the information available today, we do not, for now, see a structural change in the market. Oil is the critical variable, and how its price can pass through to inflation is the focus of our analysis. It will also be necessary to see whether the liquidity present in the system acts as a cushion for the situation or not. If the conflict does not persistently alter the price of energy, the impact will be tactical rather than strategic. We continue to monitor the data on an ongoing basis so that we can keep generating valuable insights for our advisory work.