Will Donald Trump’s Iran Strike Send Oil to $100 and Crash Global Markets?

Investors are preparing for a possible oil price shock and market chaos after U.S. President Donald Trump ordered a surprise military attack on Iran's nuclear facilities—sharply ratcheting up tensions in the Middle East and stoking concerns of a wider conflict.

Trump declared the strikes a "spectacular military success," asserting Iran's most important enrichment facilities were "completely obliterated." But the Iranian reaction came quickly and threateningly. Iran threatened "everlasting consequences" and indicated it would strike American assets in the region.

With Iran’s retaliation looming, global markets are on edge. Oil analysts say prices could spike to $100 per barrel if Tehran disrupts supplies through the Strait of Hormuz, the world’s most critical oil chokepoint.

“I think oil will open higher and volatility will surge,” said Mark Spindel of Potomac River Capital. “We’re now in uncharted waters.”

 

While Middle East markets were peaceful on Sunday—with Saudi Arabian, Qatari, and Kuwaiti indexes creeping forward—crypto markets sent out alarm signals. Ether, considered to be a measure of the risk appetite of retail investors, dropped 5%, taking its losses from Israel's first June 13 attacks to 13%.

Economists worry that a persistent oil rally may fuel inflation, undermine consumer confidence, and derail interest-rate reductions. "This could put us on the path to $100 oil," said energy analyst Saul Kavonic, noting Iran could target oil infrastructure or harass shipping lanes.

Though Brent crude had already risen 18% since early June, the S&P 500 has been relatively unchanged, with Wall Street holding out for more definitive signs of what Iran might do next.

Some, such as Jamie Cox of Harris Financial, think Iran might crack under the pressure and negotiate a peace agreement. "They've lost all leverage. A face-saving exit could be their only way out," he said.

Nevertheless, if past is prologue, market panic won't last long. Stocks fell temporarily in the course of previous Middle East shootouts and then bounced back. The S&P 500 lost only 0.3% in the three weeks following the invasion of Iraq in 2003 but gained 2.3% over two months.

The U.S. dollar, on the other hand, might recover momentarily on safe-haven buying—but longer-term trends are uncertain.

Also Read: Israel-Iran War: Is This Trump’s Biggest Foreign Policy Gamble? Details

With Reuters Inputs