Global Spotlight! "Black Swan" Strikes Suddenly, Middle East Situation Escalates Rapidly - How to Respond Next Week?

Weekend, global investors are closely watching the Middle East situation!

On the 28th local time, Israel and the United States launched attacks on multiple targets, including the Iranian presidential palace. Subsequently, Iran launched missile strikes on Tel Aviv and other locations in Israel. Several U.S. military bases in the Middle East were also targeted.

According to foreign media reports, multiple trade sources revealed that, influenced by the U.S. attacks on Iran, several major oil companies and traders have suspended oil and fuel shipments through the Strait of Hormuz.

So, how much impact will the latest “black swan” event have on the crude oil market? Next week, how will global stock markets perform?

Iran Claims to Destroy U.S. Radar

According to CCTV News, on the afternoon of the 28th local time, the Public Relations Department of the Iranian Islamic Revolutionary Guard Corps announced that the U.S. FP132 radar located in Qatar, which can detect up to 5,000 kilometers, as well as related equipment used for tracking ballistic missiles, have been completely destroyed.

On the same day, the Iranian Islamic Republic Army issued Statement No. 1, stating that the military launched an offensive operation, with dozens of attack drones taking off.

Iran’s military officially initiated its first large-scale drone attack operation. This action targeted specific Israeli objectives and all related interests of the regime.

The statement emphasized that this attack aims to punish the aggressors, and military operations will continue until the enemy is thoroughly punished.

Earlier that day, the Iranian Revolutionary Guard Corps officially announced the launch of a transnational strike operation codenamed “Honest Promise 4.” According to their continuous announcements, this operation is intended to retaliate against U.S. and Israeli aggression on Iranian territory.

Middle Eastern media reported on the 28th that after the joint military strikes by the U.S. and Israel on Iran, explosions also occurred in other Middle Eastern countries such as Bahrain, the UAE, Qatar, Saudi Arabia, and Kuwait, besides Israel. Iranian television reported that Iran is striking U.S. military bases in the Middle East.

On February 28 local time, U.S. Senate Armed Services Committee Chairman and Republican Senator from Mississippi, Roger Wicker, issued a statement supporting President Trump’s strikes against Iran.

On the same day, a spokesperson for Senate Armed Services Committee Democrat leader Jack Reed said that Reed had not been notified in advance about the airstrikes on Iran.

Global Markets Prepare for a “Shockwave”

Some analysts suggest that after the U.S. and Israel launched a “major military operation” against Iran, the impact on markets could be far more severe than recent series of geopolitical conflicts.

In June 2025, when Israel attacked Iran’s nuclear facilities, stock markets plunged sharply at opening but recovered once it was clear that the Strait of Hormuz was unaffected. Kenneth Wu, Director of Private Wealth Management at UOB Kay Hian, said, “This will be the pattern for market reference next Monday.” He added that safe-haven trades might emerge, with the dollar and yen strengthening, and funds flowing into gold.

Other market observers shared similar views. Aisia Garcia-Erellano, Chief Economist for Asia-Pacific at France’s Banque Commerciale, also expects a “volatile and safe-haven” opening next Monday, with global stocks possibly falling 1-2% or more, U.S. Treasury yields dropping 5-10 basis points, and oil prices rising 5-10%. However, she warned investors to “not bet heavily” and to wait for Iran’s response.

Nevertheless, some fund managers noted that safe-haven positions have been accumulated over several weeks, which could cushion the initial volatility once trading begins. Recent trends such as rising oil prices and increased demand for government bonds already reflect some “crisis environment.”

According to CNBC, although the market has anticipated this development, investors are closely watching whether the U.S.'s latest actions will remain short-term and focused or escalate into a prolonged regional conflict. David Rouch of Quantum Strategies analyzed the market impact from the perspective of conflict duration and whether Iran will attempt to block the Strait of Hormuz. He said if the conflict is short and controllable, safe-haven flows and oil price spikes might be temporary.

If the conflict escalates into a long-term “regime change attempt” lasting three to five weeks, with investors pricing in broader conflict and longer-term oil supply disruptions, the market response could be “quite terrible.” Rouch said he would increase gold holdings to about 15% of his portfolio as a defensive hedge.

Global X ETFs strategist Liang Bingxiong stated that given the reliance on stable energy supplies and trade routes, Iran’s long-term retaliation could significantly impact Asian markets. He expects global stocks to open lower and become more volatile, especially in high-beta and cyclical sectors.

St. Lucia Asset Management Co-Chief Investment Officer Florian Weidinger said, “This will definitely have a bigger impact than the Venezuela incident.” He also expects oil prices to rise more sharply next week.

Kenneth Wu of UOB Kay Hian noted, “Venezuela is 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 about 13 million barrels of oil pass through the Strait daily in 2025, accounting for roughly 31% of global maritime oil flows.

Oil Prices Could Surge

According to a report from Equirus Securities, after Israel’s attack on Iran, the Strait of Hormuz instantly became a focal point. If Tehran retaliates by disrupting this critical global energy chokepoint, oil prices could surge to $95-$110 per barrel.

Equirus warns that Iran’s production of about 3.3 million barrels per day (around 3% of global supply) is at the center of the current escalation. Assuming a 1% supply shock triggers a 3-5% price response, just Iran’s oil supply disruption could push oil prices up by 9-15%.

At a baseline of $70 per barrel, this implies an increase of about $6-$11, pushing prices to the $76-$81 range solely due to direct supply loss.

However, the report emphasizes that markets do not price conflicts mechanically. If tensions threaten the transit through the Strait of Hormuz, risk premiums could become structural rather than proportional. Even a partial disruption risk could embed geopolitical premiums of $20-$40 per barrel, reopening the path to $95-$110 or higher.

Since the U.S. began deploying military assets in the Middle East, oil prices have already risen about 10%, reflecting the geopolitical risks driven by headlines as described.

The Strait of Hormuz carries a significant share of global maritime oil and LNG shipments, making it a strategic leverage point in any confrontation involving Iran.

Tehran has multiple response options without declaring an official closure. These include increasing harassment of oil tankers, imposing temporary navigation restrictions during military exercises, drone overflights, and boarding incidents, all aimed at raising insurance and freight costs while avoiding a full blockade.

Iran can also signal the market by slowing or intermittently restricting transit. A sustained closure would massively disrupt global energy trade and could provoke a U.S.-led naval response, while also limiting Iran’s own exports.

Equirus notes that oil markets typically embed geopolitical premiums during initial escalation, which then adjust as trade flows realign and supply fundamentals reassert dominance.

(Source: Securities Times)