Market analysts react to US-Israel strikes on Iran

• Oil prices expected to rise substantially, with analysts predicting a 10-25% premium even without a Hormuz blockade; a full disruption could impact over 20% of global oil and LNG flows and drive prices into triple digits
• Safe-haven assets like gold projected to gap higher on Monday's open, while high-beta currencies and risk assets face volatility amid potential retaliation and regional spillover concerns
• Energy sector identified as 'obvious' rally candidate, with analysts noting energy remains 'inexpensive' despite escalating Middle East tensions

Market Analysts React to US-Israel Strikes on Iran

Key Event: The United States and Israel launched military strikes against Iran on Saturday, February 28, targeting its leadership. Iran responded with missile launches toward Israel and warned of closing the Strait of Hormuz to navigation.

Immediate Market Impact:

Several oil majors and top trading houses suspended crude oil, fuel, and LNG shipments through the Strait of Hormuz following the attacks. The strait handles over 20% of global oil and LNG flows.

Analyst Projections:

Oil Prices:

• Vishnu Varathan (Mizuho): Expects a 10-25% premium on oil prices without a Hormuz blockade; a complete blockade could trigger a 50% premium
• Saul Kovanic (MST Marquee): Predicts oil could exceed $100 per barrel with disruptions; a full Strait closure could send prices to triple digits—potentially three times worse than the 1970s Arab oil embargo
• Minimal disruption: $2+ million barrels per day could be affected, adding several dollars to oil prices

Other Asset Classes:

• Gold expected to gap higher as a safe-haven asset
• Energy sector likely to rally Monday
• High-beta currencies and risk assets face volatility
• LNG prices could retest 2022 record highs in extreme scenarios

OPEC Response: May face pressure to increase production to offset supply disruptions.

Regional Risk: Nearby Gulf Arab oil-producing nations on high alert as conflict threatens to expand regionally, with both intentional and unintentional escalation difficult to predict.

Analysts unanimously expect elevated geopolitical risk premiums when markets open Monday, with energy and gold presenting the clearest investment opportunities.