Oil Prices Continue Rising: The economic impact of the Middle East conflict

By EC Assets · Published 3 March 2026 · Updated 7 March 2026

Geopolitical risk is the one variable no model can fully price. The events unfolding in the Middle East remind us of that with force.

As conflict between the U.S., Israel, and Iran escalates, our thoughts are first and foremost with the people in the region. We wish safety, peace, and resilience to everyone affected. Behind every headline are families, communities, and lives. That matters more than any market move.

With that said, markets are reacting. And understanding why is part of responsible investing.

The Strait of Hormus carries roughly a fifth of the world's seaborne oil supply. With tanker traffic nearly halted and key infrastructure under pressure, Brent crude has climbed past $80 per barrel from around $61 at the start of the year. European natural gas futures have surged as well, after major LNG production was disrupted.

OPEC+ responded with a production increase of 206,000 barrels per day for April. But as analysts have pointed out: production targets mean little when export routes are constrained. You can pump more oil. You can't ship it through a closed strait.

The ripple effects are real. Higher energy costs act as a tax on consumers and businesses alike. Central banks face a difficult balancing act between fighting inflation and supporting growth. China, Europe, and emerging markets that depend on Gulf energy imports are particularly exposed.

But here is what history also teaches us.

Energy shocks create disruption. They also accelerate adaptation. The 1970s oil crises reshaped global energy policy. The 2022 energy shock fast-tracked Europe's pivot toward renewables and LNG diversification. Every crisis has planted seeds for greater resilience.

We are already seeing it. Strategic reserves exist for exactly these moments. Alternative supply chains are being activated. The global energy landscape is far more diversified than it was a decade ago. And the world's capacity to respond to supply shocks has never been stronger.

The conflict also underscores a deeper structural shift. Energy security is no longer a niche policy concern. It is a strategic priority for every government, every allocator, and every institution managing long-term capital. The investments being made today in infrastructure, diversification, and energy independence will define the next era of global stability.

For markets, volatility is the near-term reality. Uncertainty around duration and scope makes precise forecasting impossible. But the base case among most economists points to a contained conflict. Strategic interests on all sides favor resolution, and the global economy has shown remarkable resilience through multiple shocks over the past several years.

At EC Assets, we view geopolitical risk as a permanent feature of markets, not an anomaly. Managing it requires discipline, systematic frameworks, and the willingness to step aside when the risk-reward equation shifts.

For investors, the message is straightforward. Stay disciplined. Understand your exposures. Respect the uncertainty. And remember that markets have navigated every geopolitical crisis in modern history and emerged stronger.

The world has been here before. It has always found a way forward.

Our hope is that this crisis resolves swiftly and that stability returns to the region. For the people living through it, and for the global community connected to it.