Markets were unable to immediately react to U.S. missile strikes on Iran’s nuclear infrastructure as most were closed over the weekend. However, experts anticipate a significant rise in oil prices when trading resumes, reports Baltimore Chronicle citing Reuters.
While traditional financial markets remained closed, the first immediate response came from cryptocurrencies: Ethereum dropped more than 5%, while Bitcoin fell by about 1%.
Oil is expected to be the primary asset affected by these developments. Jamie Cox, Managing Partner at Harris Financial Group, predicted a sharp spike in oil prices following the first reports of the strikes. According to him, the destruction of Iran’s nuclear capabilities stripped the country of its leverage, potentially pushing Tehran toward a peaceful agreement.
Mark Spindel, CIO of Potomac River Capital, believes the situation will increase overall geopolitical tension, placing markets under considerable uncertainty. He noted that assessing the extent of the damage would take time and that heightened volatility would likely be most evident in oil markets.
Among the key risks cited by analysts is the potential for Iran to block the Strait of Hormuz—a critical maritime route through which around 20% of the world’s oil exports pass. If Iran takes this step, the global economic impact could be substantial.
Senior Energy Analyst at MST Marquee (Sydney, Australia) suggested oil prices could rise to $100 per barrel if Iran delivers a strong response. Meanwhile, F/M Investments Chief Investment Officer Alex Morris (Washington, D.C., U.S.) projected a climb to $80 per barrel. Still, some analysts noted that prices may stabilize over the longer term.
Asian markets, in particular, face elevated risk due to potential supply chain disruptions from a prolonged conflict in the Middle East. These disruptions could fuel inflationary pressures and negatively affect economic growth forecasts across the region.
With the prospects of a swift resolution diminishing, investors are expected to reassess risk across the board. Some analysts anticipate a flight to safe-haven assets, stronger demand for the U.S. dollar, and overall weakening of Asian risk assets as markets weigh the consequences of prolonged geopolitical instability and surging oil prices.
Earlier we wrote that Iran ramps up oil exports after Israeli strikes.