Global investors are closely monitoring developments in the Middle East over the weekend. On the 28th local time, Israel and the United States launched attacks on multiple targets, including the Iranian presidential palace. Subsequently, Iran retaliated with missile strikes on areas such as Tel Aviv, Israel. Multiple US military bases in the Middle East region were also attacked.
According to foreign media reports, several trade sources indicated that, affected by the US strikes on Iran, a number of major oil companies and traders have suspended the transport of oil and fuel through the Strait of Hormuz.
The critical question is the extent of the impact this latest "black swan" event will have on the crude oil market. How will global stock markets perform in the coming week?
Iran Claims Destruction of US Radar According to reports from CCTV News, on the afternoon of the 28th local time, the Public Relations Department of Iran's Islamic Revolutionary Guard Corps stated that the US FP132 radar located in Qatar, with a detection range of 5,000 kilometers, along with related equipment used for tracking ballistic missiles, has been completely destroyed.
On the same day, the Army of the Islamic Republic of Iran issued Announcement No. 1, stating that the army had launched offensive operations, with dozens of attack drones already airborne. The Iranian army formally initiated its first large-scale offensive drone operation. This action targets specific objectives in Israel and all related facilities associated with the regime.
The announcement emphasized that these attacks aim to punish the aggressors, and military operations will continue until the enemy is thoroughly punished.
Earlier that day, Iran's Islamic Revolutionary Guard Corps officially announced the start of a cross-border strike operation codenamed "True Promise 4." According to successive announcements, this operation aims to retaliate for the aggressive actions by the US and Israel against Iranian territory.
According to Middle Eastern media reports on the 28th, following the joint US-Israeli military strikes on Iran, explosions were heard in Bahrain, the UAE, Qatar, Saudi Arabia, Kuwait, and other locations in the Middle East besides Israel. Iranian television reported that Iran is striking US military bases in the Middle East.
On February 28th local time, US Senate Armed Services Committee Chairman, Republican Senator Roger Wicker of Mississippi, issued a statement supporting US President Trump's strike actions against Iran.
On the same day, a spokesperson for the Committee's top Democrat, Senator Jack Reed, stated that Reed did not receive prior notification regarding the airstrikes on Iran.
Global Markets Brace for Impact Analysis suggests that following this "major military action" by the US and Israel against Iran, the impact on markets could be far more severe than recent series of geopolitical conflicts.
In June 2025, when Israel attacked Iranian nuclear facilities, stock markets opened sharply lower, but recovered once it became clear that the Strait of Hormuz remained unobstructed. Kenneth Wu, Director of the Private Wealth Management Department at UOB Kay Hian, stated, "This will be the pattern for markets to reference on Monday." He added that safe-haven operations are likely, with the US dollar and Japanese yen strengthening, and capital flowing into gold.
Other market observers expressed similar views. Alicia Garcia-Herrero, Chief Economist for Asia Pacific at Natixis, also expects a "volatile and risk-off" opening on Monday, with global equities potentially falling 1% to 2% or more, US Treasury yields dropping 5 to 10 basis points, and oil prices rising 5% to 10%. However, she cautioned investors "not to place heavy bets" and to wait for Iran's response.
Nevertheless, some fund managers noted that safe-haven positions have been accumulating for weeks, which might provide some buffer against initial volatility once trading begins. Recent cross-asset movements, such as stronger oil prices and increased demand for government bonds, already reflect "a hint of a crisis environment."
According to CNBC, although markets had anticipated this development, investors are closely watching whether the latest US actions remain short-term and focused, or escalate into a prolonged regional conflict. David Roche of Quantum Strategy analyzed the market impact based on the conflict's duration and whether Iran attempts to blockade the Strait of Hormuz. He stated that if the conflict is brief and contained, then the safe-haven moves and oil price spike could also be short-lived.
If it escalates into a prolonged "regime change attempt" lasting three to five weeks, the market reaction would be "pretty nasty" as investors price in a broader conflict and longer-term oil supply disruption. Roche said that in such a scenario, he would increase his gold holdings to about 15% of his portfolio as a defensive hedge.
Hungsun Leung, Investment Strategist at Global X ETFs, stated that given the reliance on stable energy supplies and trade routes, prolonged retaliation by Iran would have a particularly significant impact on Asian markets. He anticipates a lower and more volatile opening for global equities, especially in high-beta and cyclical sectors.
Florian Weidinger, Co-Chief Investment Officer at St. Lucia Asset Management, stated, "This is certainly more impactful than the Venezuela incident." He expects oil prices to rise more sharply next week.
Kenneth Wu from UOB Kay Hian noted, "Venezuela was a production issue, Iran is a chokepoint issue." The Strait of Hormuz, located between Oman and Iran, is considered one of the world's most critical oil chokepoints. Data from market intelligence firm Kpler shows that in 2025, approximately 13 million barrels of crude oil per day transited the Strait of Hormuz, accounting for about 31% of global seaborne crude oil flow.
Potential Oil Price Surge According to a report from Equirus Securities, following the Israeli strike on Iran, the Strait of Hormuz instantly became the focal point. If Tehran retaliates by disrupting supplies through this globally critical energy chokepoint, crude oil prices risk surging to $95-$110 per barrel.
Equirus warned that Iran's production of nearly 3.3 million barrels per day, accounting for about 3% of global supply, is at the center of the current escalation. Assuming a 3% to 5% price reaction for every 1% supply shock, a disruption solely to Iranian oil supply could drive crude prices up by 9% to 15%.
Based on a baseline price of $70 per barrel, this implies an increase of roughly $6 to $11, pushing oil prices into the $76-$81 range just from the direct supply loss.
However, the report emphasized that markets do not price conflicts mechanically. If tensions threaten transit through the Strait of Hormuz, the risk premium could become structural rather than proportional. Even the risk of a partial disruption could embed a geopolitical premium of $20-$40 per barrel, reopening a path to levels of $95-$110 or higher.
Since the US began deploying military assets in the Middle East, crude prices have risen by approximately 10%, reflecting the headline-driven geopolitical risk described in the report.
The Strait of Hormuz carries a massive share of globally seaborne oil and liquefied natural gas, making it a strategic lever in any confrontation involving Iran.
Tehran has various response options short of declaring a formal closure. These include increased harassment of tankers, temporary navigation restrictions during military exercises, drone overflights, and boarding incidents, aimed at raising insurance and freight costs while avoiding a full blockade.
Iran could also signal to the market by slowing or intermittently restricting transit. A sustained closure would massively disrupt global energy trade and likely provoke a US-led naval response, while also restricting Iran's own exports.
Equirus stated that oil markets typically embed a geopolitical premium during the initial phase of an escalation, followed by an adjustment as trade flows realign and supply fundamentals reassert dominance.
