Nothing screams “forward-looking markets” like building earnings models in a calm, pre-war fantasy… right before the U.S. decides to take a swing at Iran and set the oil market on fire.
We’ve seen this play out before. The Gulf War, the Iraq War—same pattern every time. Initial shrug, then oil spikes, then inflation creeps in, margins get squeezed, and suddenly everyone rediscovers the concept of “second-order effects.” Even smaller shocks like the 2019 Abqaiq–Khurais attack were enough to remind the world how fragile energy supply really is.
And now we’re playing games around the Strait of Hormuz—that tiny little artery carrying roughly 20% of global oil. Disrupt that, and it’s not just crude prices. It’s shipping delays, insurance spikes, fertilizer costs, airline margins, food inflation—basically a slow bleed across the entire global economy.
But sure, let’s pretend earnings estimates built before all this are still valid.
The next earnings print? Yeah, it might still look “okay”—a nice little lag effect, a final snapshot of that pre-Iran-war world before the shock fully flows through. Maybe even enough for people to say, “see, resilience.”
But the guidance? That’s where reality shows up.
Because no CEO—literally no sane CEO—is going to look at oil spiking, supply chains getting scarred, inflation re-accelerating, and possibly months of disruption… and then confidently paint a rosy 12-month outlook. Not when economists are already talking about recession risks, stagflation, and prolonged supply shocks tied to this conflict.
So yeah, enjoy the “fine” next quarter. That’s just the afterglow.
The next one-year outlook? That’s where the darkness gets properly priced in—just a few quarters late, as usual.
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