Oil, Iran and global supply chains: Why duration matters for markets

The recent Iran-related escalation in the Middle East has moved beyond a short-term oil shock. With strained negotiations and only a tenuous ceasefire, the risk of prolonged disruption—particularly around the Strait of Hormuz—has increased. As we have said before, duration of the conflict—not just its magnitude—matters. The conflict has now persisted long enough to have long-term, global economic implications. Its potential impact extends well beyond the daily movement in oil prices. While effects on the energy sector are clear, broader spillovers—both direct and indirect—are likely to touch...