Global week ahead: Operation Epic Fury means new risks for markets

• Middle East stock markets declined on Sunday with Saudi Arabia's Tadawul, Oman's Muscat index, and Bahrain's exchange all trading in the red, while markets in Dubai, Abu Dhabi, and Israel remained closed until Monday
• Brent crude oil prices are predicted to surge above $80 per barrel as the Strait of Hormuz remains closed, forcing ships to reroute around Africa and adding significant time and cost to global shipments
• Over 1,500 flights were cancelled across the Middle East region and more than 19,000 flights delayed globally due to widespread airspace closures, with airlines working to arrange repatriation flights

Market Summary: Operation Epic Fury Creates Global Volatility

Key Developments

U.S. and Israeli forces launched coordinated strikes on Iran dubbed "Operation Epic Fury," triggering significant market disruptions and geopolitical uncertainty. The attacks represent a fundamental shift in international relations not seen since World War II.

Market Impact

Middle East Equities: Regional stock markets declined sharply in Sunday trading. Saudi Arabia's Tadawul, Oman's Muscat index, and Bahrain's exchange all traded lower. Markets in Dubai, Abu Dhabi, and Israel remained closed Sunday but are expected to resume Monday with anticipated sell-offs.

Oil Markets: Brent crude is projected to spike above $80 per barrel despite OPEC's recent decision to increase output earlier and more aggressively than planned. As of early Monday trading, oil prices showed significant gains.

Shipping Disruption: The Strait of Hormuz remains closed to vessel traffic, with major shipping companies including Maersk, MSC, and Hapag-Lloyd suspending all transits. Iran's Revolutionary Guard reportedly struck multiple oil tankers in retaliatory actions. Vessels are being rerouted around Africa, substantially increasing shipping times and costs.

Aviation Chaos: Over 1,500 flights were cancelled across the Middle East Sunday, with more than 19,000 flights delayed globally. Airspace closures continue throughout the region.

Additional Concerns

An unexpected controversy emerged involving Anthropic's Claude AI technology, which the U.S. military reportedly used to support strikes. The Pentagon has labeled Anthropic a "supply chain risk" after the company resisted demands for unrestricted military use of its AI platform.

Outlook

Investors face elevated uncertainty as they assess long-term portfolio implications beyond initial knee-jerk reactions.