Perspectives on the Middle East conflict

US-Iran conflict: Key signposts to monitor

1 March 2026

The confirmed death of Supreme Leader Ayatollah Ali Khamenei and other key regime leaders injects maximum uncertainty into events from here, ranging from the impact on Iranian military capabilities and cohesion to regime stability and succession implications.

Risks remain highly elevated throughout the region and, from a market perspective, energy infrastructure and shipping lanes are key areas to watch.

Iran's president and IRGC leaders have vowed retaliation, while President Trump has said US and Israeli attacks will continue "throughout the week or, as long as necessary to achieve our objectives of peace throughout the Middle East and, indeed, throughout the world."

All of this implies further military action over the coming days and potentially beyond that, as well as elevated macro and market risks.

Key signposts to monitor

• First and most important: Iran's military response and target list — Iran resumed retaliatory missile and drone attacks across the region on Sunday, indicating continued military capabilities amid significant leadership upheaval. The wider the target list, the higher the probability of sustained and widened regional conflict (such as attacks on civilian infrastructure or economic targets including cyberattacks)
• Second: energy infrastructure risk — This could include confirmed attacks on or credible risks to Iranian oil and gas facilities and Gulf energy infrastructure.
• Third: shipping and the Strait of Hormuz — Among the risks here are harassment of commercial shipping, mining risk, insurance cost spikes, rerouting or sustained slowdowns, etc.

Other signposts I'm watching

• The duration and tempo of military operations — Do US/Israeli strikes slow after initial battle-damage assessments? Does the campaign shift from "days" to weeks, indicating incomplete degradation of Iranian capabilities, etc.?
• Proxy activation and enthusiasm — What response, if any, will there be from Houthis, Shiite militias in Iraq and Syria, Hezbollah in Lebanon, etc.?
• US force posture and exposure — What force protection measures will be taken for the roughly 40,000 US military personnel in theater? I’ll be watching for evidence of dispersal vs. vulnerability; direct Iranian successes against US military assets; etc.
• GCC "pulled-in" indicator — This includes the level of missile interceptions or other impacts on Gulf states hosting US military assets; length/spread of airspace closures and/or sustained defensive operations, etc.
• Diplomatic signals vs. rhetoric — Watch for actions, not statements, to determine if/when this resumes.
• Iranian domestic political responses — Will there be mass protests against the regime following Trump's regime change statements? Look for visible signs of support for the regime, the Islamic Revolutionary Guard Corps (IRGC) capabilities to suppress opposition, etc.
• US domestic political reaction — I’m keeping an eye on polling indicators, responses from Congress, etc.
• Great-power rival and US allied reactions — Will China and Russia do more than offer rhetorical support? How will US allies respond and what does this say about ongoing deleveraging from US security relationships, etc.?
• The risk of mission creep and spread — Does significant US military action in the Middle East diminish capacity and/or reduce policy attention on Venezuela, Cuba, the upcoming US-China summit in Beijing, etc.?

Bottom line

Over the short-term, markets should focus less on headlines and tweets and more on observable signposts — especially Iranian targeting choices and regime-military cohesion, energy and shipping risk, and whether this conflict is seeking a ceiling or drifting into a prolonged campaign. The next 24 – 72 hours will help determine the likely probabilities from here.

Longer term, the broader context matters: This ongoing and seismic development is part of a broader shift across the geopolitical environment and will likely accelerate global fragmentation and conflict, promote less policy cohesion, and further reinforce a global policy focus on national security issues, writ large.

US-Iran conflict escalates: What investors should watch now

28 February 2026

Today the United States and Israel launched direct military strikes on Iranian territory, marking a decisive escalation in a long‑running confrontation that has now moved from coercive diplomacy and shadow conflict into overt interstate warfare. President Trump has confirmed that US forces are conducting “major combat operations” alongside Israel, framing the campaign around degrading Iran’s missile capabilities, preventing nuclear reconstitution, and applying maximum pressure on the Iranian regime.

This shift matters for markets not because war itself is new in the Middle East, but because the thresholds crossed meaningfully raise escalation risk and expand the set of plausible economic outcomes over the coming days and weeks.

What has happened

Joint US–Israeli strikes have hit multiple Iranian cities, including Tehran and key military and industrial hubs, targeting missile infrastructure and regime‑linked facilities. The Pentagon has named the operation “Operation Epic Fury,” underscoring that this is not a one‑off signaling strike but an open‑ended military campaign with the maximalist goal of regime change.

Iran has already begun retaliating, launching ballistic missiles toward Israel and US regional assets. Missile and air‑defense activity have been reported across Israel and the Gulf, while several countries hosting US bases have closed airspace and diverted commercial flights. Damage and casualty assessments remain incomplete, and information is still fragmentary — a typical feature of the early phase of fast‑moving conflicts.

Why this is different

From an investor perspective, the key distinction is that the United States has now crossed from deterrence to direct warfighting against Iran. Two implications follow:

• First, Iran’s incentives have changed. Public US rhetoric has moved beyond narrow military objectives toward maximum regime pressure, which reduces Tehran’s incentive for restraint and raises the probability of sustained retaliation rather than symbolic response.
• Second, the conflict has widened geographically. What began as strikes inside Iran has already extended to Israel and the Gulf, increasing the risk that third‑party states and critical infrastructure are pulled into the escalation cycle, even unintentionally.

The key variables to watch

The market impact from here depends less on US intent — which is now clear — and more on Iranian choices.

• Scope of retaliation Iran can calibrate its response along a wide spectrum, from limited missile fire toward Israel to sustained attacks on US bases or regional partners. The broader the target set, the higher the escalation risk.
• Energy infrastructure and shipping Full closure of the Strait of Hormuz remains a low‑probability outcome, but partial disruption, harassment of shipping, or attacks on energy facilities would be enough to generate significant oil price volatility and risk premia.
• Duration of operations Battle damage assessments will determine whether follow‑on US strikes are required. If initial attacks fail to significantly degrade Iran’s missile or nuclear‑adjacent capabilities, the campaign could extend in time and scope.

Market and macro implications

In the near term, markets should expect a risk‑off bias, driven primarily by energy and geopolitical uncertainty rather than immediate economic damage.

• Energy Oil prices face asymmetric upside risk. Even without physical supply losses, higher insurance costs, shipping disruptions, and geopolitical risk premia can move prices meaningfully.
• Inflation and policy An energy shock at this stage would complicate the global disinflation narrative and reinforce central bank caution, even if growth softens elsewhere.
• Risk assets Equity and credit volatility are likely to remain elevated until there is clarity on whether Iran is signaling a ceiling or preparing for wider escalation.

Structurally, the episode reinforces my longer‑term investment themes around energy security, defense, dual-use technologies (e.g., artificial intelligence), cyber capabilities, and geopolitical fragmentation.

Bottom line

The US decision to strike Iran directly has shifted markets into a regime where tail risks temporarily matter more than base cases. A full regional war remains unlikely, in my view, but the distribution of outcomes has widened materially. Investors should focus less on headlines and more on escalation signposts: Iranian targeting choices, energy infrastructure security, and signals of whether either side is seeking a ceiling or preparing for a prolonged confrontation.

As events remain fluid, clarity will come not from rhetoric, but from actions over the next several days. We will continue to monitor geopolitical developments and the risks and opportunities they create for investors.