The coordinated airstrikes, dubbed Operation Epic Fury, targeted military and nuclear facilities across Iran, marking a significant escalation in the Middle East conflict. According to research from seven sources, the operation involved strikes on nearly 900 targets over a 12-hour period. In response, Iran closed the Strait of Hormuz on 2 March 2026, a chokepoint for about 20% of global oil shipments, causing the largest oil supply disruption in history. Brent crude prices surged to nearly $120 per barrel in the opening week before settling above $100 per barrel, with occasional dips into the $90s, the research indicated.
Global equity markets sold off sharply as the conflict escalated, according to research from two sources. A 48-hour suspension of strikes began on 27 March 2026, followed by the tentative Islamabad Accord on 6 April 2026, which aimed to de-escalate tensions. Since the ceasefire announcement on 27 March, the MSCI AC World index gained 6.9% in sterling terms, while commodities as measured by the S&P GSCI fell by 4.8%, according to research from seven sources. The MSCI World Momentum index returned 10.9% since the ceasefire, after falling 10.2% in March 2026. In contrast, the MSCI World Energy index shed 8.7% post-ceasefire as oil prices came down, the research showed.
The energy crisis extended beyond crude oil. Gas prices soared by 50% in a single day following a drone strike that paralysed production at the world's premier LNG export hub in Qatar, according to research from seven sources. The conflict could lead to prolonged suffering from price increases extending beyond crude oil to natural gas, fertilizers, and other commodities, the research warned. Southeast Asian nations face a risk of falling back on coal infrastructure due to the crisis, with coal-fired generation in ASEAN hitting record peaks in 2024 and 2025, according to research from seven sources.
The International Monetary Fund's First Deputy Managing Director, Daniel Katz, warned that the conflict carries significant risks for global inflation and growth, but it is too early to assess the full impact. Katz noted that a prolonged disruption in energy markets, especially closure of the Strait of Hormuz, could lead to serious economic consequences. He added that if the rise in energy prices proves temporary, central banks may look through the shock, but a persistent shock could trigger a monetary policy response.
Investment funds have responded to the volatile environment. Ruffer Investment Company increased its allocation to five-year UK government bonds to 15% in March 2026, citing exaggerated fears of interest rate rises, according to managers Jasmine Yeo, Ian Rees and Alexander Chartres. Ruffer's net asset value fell 1.8% in March 2026, but its shares rose 0.8% as the discount narrowed, research from seven sources showed. Biotech Growth Trust's NAV rose 2.5% in March 2026, beating the Nasdaq Biotechnology index decline of 1.5%, according to research from seven sources. Pershing Square Holdings launched US IPOs for Pershing Square USA fund and Pershing Square Inc, aiming to raise at least $5bn, the research indicated.
The conflict's impact on the energy transition is contradictory. Jefferies argued that the Middle East conflict is likely to accelerate Europe's shift away from fossil fuels in the medium term. Europe's renewable share of EU power generation rose from around 30% in 2019 to nearly 50% in 2025, and its dependence on Russian gas fell from 45% to 13%, according to Jefferies. However, the crisis may stall decarbonisation in other regions, as Southeast Asian nations risk falling back on coal infrastructure, with coal-fired generation in ASEAN hitting record peaks in 2024 and 2025, according to research from seven sources.
Political obstacles to peace remain significant. The Trump administration continues to insist on practically impossible demands for peace with Iran, according to research from seven sources. Meanwhile, a new Supreme Leader in Tehran is described as more rigid and radical than his predecessor, complicating diplomatic efforts, the research indicated.
Several key unknowns persist. The specific terms of the Islamabad Accord have not been disclosed, and it remains unclear whether the ceasefire will hold and lead to a lasting peace. The duration of the Strait of Hormuz closure is uncertain, as is the full economic impact on global inflation and growth. Central banks' response to persistent energy price shocks also hangs in the balance.