Iran War Could Escalate Into A Highly Damaging Energy Crisis

Escalation of the US‑Iran conflict around the Strait of Hormuz is the key event. A sustained disruption to the strait (which handles roughly ~20% of seaborne oil) could drive double‑digit percent upward moves in oil prices, materially increase market volatility, and presents a credible risk of tipping the global economy toward recession, prompting a broad risk‑off response across asset classes.

Analysis

Escalation of the US‑Iran conflict around the Strait of Hormuz is the key event. A sustained disruption to the strait (which handles roughly ~20% of seaborne oil) could drive double‑digit percent upward moves in oil prices, materially increase market volatility, and presents a credible risk of tipping the global economy toward recession, prompting a broad risk‑off response across asset classes.