Escalating tensions in Middle East may lead to global financial market instability.

From Investing.com: 2025-06-15 06:57:00

US equity markets experienced a slight decline despite news of a major Israeli attack on Iran. The potential impact on global markets stems from the risk of the vital Strait of Hormuz being closed by Iran. Roughly 20% of global oil supplies pass through this narrow waterway, and Iran has the capability to disrupt commercial traffic with various tactics. A shutdown of the strait could lead to a tripling or quadrupling of oil prices, potentially exceeding $300 per barrel. Such a major oil price shock historically triggers business cycle recessions and significant stock market declines. The threat of Iran blocking the strait as a form of blackmail adds further complexity to the situation. The risk of escalating events leading to a shutdown of the strait is a critical concern that could have far-reaching consequences on global financial markets.



Read more at Investing.com: How Escalating Tensions in the Middle East Could Impact Global Financial Markets