Iran Conflict pushes Oil Price above USD 100 – Markets Under Pressure
The ongoing tensions surrounding Iran have triggered a sharp rise in oil prices and are weighing heavily on international financial markets. Despite the heightened uncertainty, we currently see no need for immediate action. However, we are monitoring developments closely and remain flexible to adapt our strategy if circumstances change.
The lack of progress in resolving the Iran conflict and reopening the Strait of Hormuz has led to significant turbulence across global financial markets.
Despite recent developments, we continue to expect a stabilisation of the situation within the next three to five weeks.
We are currently considering reducing our commodity positions and increasing equity exposure once the situation shows clear signs of stabilisation.
What Has Happened?
The ongoing difficulties in resolving the Iran conflict – particularly regarding the reopening of the Strait of Hormuz and the lack of progress towards a potential regime change in Tehran – led to pronounced volatility in financial markets on Monday morning. Iran continues to demonstrate its capability to target critical infrastructure, such as water treatment facilities in neighbouring countries. Nevertheless, there are initial signs of easing tensions: the number of Iranian missile attacks is decreasing, air traffic has returned to normal, and the G7 countries are planning to release additional strategic oil reserves. Furthermore, Donald Trump has stated that the main objectives in Iran have already been achieved, which could indicate a possible de-escalation.
How Are the Markets Reacting?
- The oil price has clearly surpassed the critical threshold of USD 100, temporarily reaching USD 110 per barrel on Monday – an increase of 65% in just ten days and 75% since the beginning of the year.
- Asian equity markets have suffered significant losses, including a 5% decline in Japan.
- The global equity market, which had previously benefited from the resilience of the US market, is now expected to lose its year-to-date gains (in USD terms).
|
Market
|
Price Change (since 27 Feb) |
|
Market
|
Price Change (since 27 Feb) |
Energy |
Oil (Brent) |
50.3% |
Rel. Losers |
Korean Equities (9.3.) |
-15.9% |
Natural Gas (TTF) |
67.0% |
|
Spanish Equities |
-7.0% |
|
Metals |
Gold |
-2.6% |
|
Basic Materials Equities |
-9.3% |
Currencies |
USD / CHF |
1.5% |
|
Italian Bonds 10y |
-2.7% |
USD / EUR |
2.3% |
|
USD / ZAR (4.3.) |
-5.8% |
|
Equities |
MSCI EM Future |
-10.4% |
|
|
|
USA Future |
-3.6% |
Rel. Winners |
Global Energy Equities |
+1.2% |
|
|
Europe Future |
-9.6% |
US Nasdaq Equities |
-2.0% |
|
|
Switzerland Future |
-6.9% |
|
Chinese Equitites (9.3.) |
-2.0%. |
Interest Rates |
US 10 Year |
+25.3 bps. |
|
CDX Inv. Grade |
+12 bps |
|
EUR 10 Year |
+21.7 bps. |
|
|
|
Source: Bloomberg, Zürcher Kantonalbank as of 09.03.2026 / 08:00
Our Assessment
US armed forces continue to face difficulties in securing control over the Strait of Hormuz. Should this not be possible without deploying ground troops in the Iranian coastal region, the tense situation could persist longer than previously anticipated. Furthermore, no regime change has occurred in Tehran, and any cessation of hostilities would likely be perceived as a political defeat for the US – especially in light of the upcoming midterm elections, where the recent 20% increase in petrol prices may play a significant role.
Despite these challenges, we maintain our view that the global economy is only temporarily threatened by this surge in oil prices. Both the parties involved and the regions increasingly drawn into the conflict, such as Asia and Europe with their high energy dependency, have strong incentives to de-escalate the situation. We therefore adhere to our previous assessment and expect a calming of the situation within three to five weeks.
The current Middle East turmoil should be viewed in the context of an otherwise healthy global economy. Although weak US labour market data was released last Friday, which has further increased market volatility amid the current tensions, leading indicators point to an acceleration of global economic growth. Overall, we consider it highly unlikely that a temporary spike in oil prices will have a lasting negative impact on the world economy. Should elevated price levels persist, however, we anticipate a -0.8% effect on US GDP and a 1.6% increase in US inflation. This would likely prevent further interest rate cuts for the time being, but we do not foresee stagflation.
Therefore, our next strategic steps are likely to involve taking profits in commodities and increasing equity allocations once the situation begins to stabilise.
A turning point in commodity prices is likely to be reached soon, according to our rebalancing signal
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