Iran Conflict Raises Market Volatility but May Avoid a Full Oil Shock

Pictet Asset Management analyzes how the war in Iran could influence global markets under several geopolitical scenarios. 

• Oil and gas prices have surged following the conflict, unsettling equity markets and increasing fears of an energy-driven inflation shock.

• Despite volatility, the base case assumes limited long-term economic damage because global energy supply buffers remain stronger than in past crises.

• Investors are shifting portfolios defensively—raising allocations to cash, gold and safe-haven currencies while reducing exposure to riskier assets.

The report outlines multiple geopolitical scenarios to help investors assess how escalating or contained conflict could reshape markets.