US-IRAN CONFLICT
MARKET TRACKER

Stewardship’s Perspective — March 9

Today (Monday, March 9) saw a sharp reversal in markets. Oil spiked more than 30% Sunday night to nearly $120 per barrel before retreating below $90 by Monday afternoon. President Trump said, “I think the war is very complete, pretty much. They have no navy, no communications, they’ve got no air force. Their missiles are down to a scatter.”

Markets responded quickly to that shift in tone. Stocks finished the day positive, highlighting an important reality: this conflict is largely being priced through oil markets.

One of the biggest debates right now is how long the conflict will last. At the moment, market consensus appears to lean toward the “short war” camp.

A helpful way to think about this is through incentives. Who has an incentive to end the conflict?

In many ways, everyone does.

Iran
Iran’s leadership and military infrastructure have been heavily degraded. At the same time, roughly 60% of the government’s revenue comes from energy, meaning prolonged conflict threatens the country’s economic lifeline.

Gulf Oil Producers (Saudi Arabia, Kuwait, UAE, Qatar, Bahrain, Oman)

These countries rely on the Strait of Hormuz to export oil and natural gas.

High oil prices don’t help them if they cannot ship product. And if prices spike too high for too long, global demand eventually weakens—hurting producers over time.

China
China is the world’s largest oil importer, and roughly 40–45% of its crude imports come from the Persian Gulf.

This includes purchases of discounted Iranian crude. Disruptions in the region would raise energy costs for China’s manufacturing economy and threaten a key source of supply.

United States
Several domestic factors push toward de-escalation.

First, midterm elections are this year, and higher gasoline prices are rarely politically helpful.

Second, the administration has emphasized lower interest rates as an economic priority. Prolonged high oil prices would make that goal more difficult by pushing inflation higher.

Finally, President Trump campaigned heavily on avoiding new “forever wars.” While limited military action remains possible, a large-scale ground conflict in a country the size of Iran would be extraordinarily difficult.

Israel
Israel may believe it has already achieved many of its objectives—namely degrading Iran’s military capabilities and reducing the threat posed by missiles, drones, and regional proxy networks.

Iran’s missile and drone attacks on Gulf neighbors may also have further isolated Iran diplomatically within the region.

Taken together, many of the major players have incentives to see this conflict wind down rather than escalate further.

For markets, one key development to watch will be the safe resumption of tanker traffic through the Strait of Hormuz, which remains the most important artery for global oil flows.