Six Months On: How the US-Israel-Iran War Has Rattled Global Markets
Friday marks six months since the US and Israeli strikes on Iran started a conflict. This conflict has messed up energy flows and made financial markets around the world feel very shaky. You can see the effects of this conflict in oil prices, stocks, money values and food prices.
The biggest hit has been on energy. Brent crude went over $120 a barrel for a time in April. It is now 2026 and Brent crude is sitting at about $90 a barrel.
That is a jump from the $70 a barrel we saw just one year ago. I think this happened because the fighting stopped oil production in the Gulf.
The fighting also blocked ships from moving through the Strait of Hormuz which pushed the price of Brent crude up much. Refined fuels have felt the pain.
Diesel prices went up faster than Brent crude prices. This was because of a lack of distillates Russian refinery outages from Ukrainian strikes and less oil being sent from the Gulf.
Jet fuel prices also shot up at first because the region is so important for aviation fuel supply. However more jet fuel, from US refinery output helped make the jet fuel situation a little later on.
Despite the scale of the disruption, equity markets have proven surprisingly resilient. Stocks are up roughly 14% for the year so far — well above the 8-9% typically expected in an average year, according to analysts, suggesting investors have largely shrugged off the geopolitical risk in favour of continued gains.
Traditional safe havens, however, have behaved unpredictably. Gold tumbled nearly 25% between the war’s outbreak and July, despite having more than tripled in value in the years leading up to the conflict.
The US dollar has climbed only modestly, up 1.4% against a basket of currencies, a move analysts attribute largely to weakness in the Japanese yen rather than genuine flight-to-safety demand.
US Treasuries, meanwhile, have lost value on a total-return basis, as higher inflation expectations dampened hopes for Federal Reserve rate cuts, compounded by uncertainty over the incoming Fed chief and unexpected US debt buyback plans.
Analysts caution that six months in, markets appear to be pricing in a prolonged standoff rather than a swift resolution, with energy costs and inflation risks likely to remain elevated as long as Gulf shipping disruptions persist.
