📈 US-Iran Conflict Triggers Global Market Volatility & Oil Price Surge

The escalation of conflict between the US, Israel, and Iran on March 1, 2026, has immediately impacted global energy and financial markets, with significant implications for oil-dependent economies like Sri Lanka. • Energy & Oil Markets • Brent crude is currently trading near $73/bbl, up 20% YTD. • Analysts warn of a spike to $80/bbl in the short term, with potential to hit $100/bbl if a prolonged conflict disrupts the Strait of Hormuz (carrying 20% of global supply). • A sustained $100/bbl price could add 0.6-0.7 percentage points to global inflation. • Currency & Safe Havens • The US Dollar is expected to strengthen against most currencies due to its status as a net energy exporter, potentially increasing pressure on emerging market forex reserves. • Gold has risen 22% in 2026, reaching record highs as investors seek safe havens. • The Swiss Franc and Japanese Yen remain primary hedges against geopolitical instability. • Sector Impacts • Airlines: Significant pressure expected due to regional airspace closures and flight cancellations. • Logistics & Shipping: Major trading houses have already suspended fuel shipments through the Persian Gulf. • Technology: High volatility expected, following an existing 15% rise in US bond volatility this year. • Regional Markets • Gulf equities (Saudi Arabia, Dubai) are projected to drop between 3-5% if hostilities persist, impacting global investment sentiment.