Oil markets deeply underestimating Iran conflict: Rabobank's Michael Every

Rabobank strategist Michael Every expects the geopolitical conflict to deepen, warning that all state actors will endure significant economic pain but that the United States likely has greater capacity to absorb losses and could therefore prolong the confrontation longer than markets expect. Implication: heighted risk-off sentiment could force repricing across FX, emerging markets and risk assets as investors adjust to a longer-duration, higher-cost geopolitical environment.

Analysis

Rabobank strategist Michael Every expects the geopolitical conflict to deepen, warning that all state actors will endure significant economic pain but that the United States likely has greater capacity to absorb losses and could therefore prolong the confrontation longer than markets expect. Implication: heighted risk-off sentiment could force repricing across FX, emerging markets and risk assets as investors adjust to a longer-duration, higher-cost geopolitical environment.