Market Update: Tensions rise in the Middle East

There’s been another flare‑up of tension in Iran this year. Following on from the attack by the US and Israel on Saturday, Iran retaliated by carrying out attacks on military bases spread across the region.

Naturally, this new, heightened conflict is creating some noise in global markets. Unlike the short 12 day campaign back in 2025, this time the situation is broader and seemingly more uncertain. Iran’s long time leader and other senior figures have been killed, an election has been announced, but not scheduled, and the country is already dealing with political infighting and months of civil unrest.

Following on from the strikes carried out by Iran in the region, concerns about shipping have led businesses to avoid the Strait of Hormuz, a crucial route for global oil supply. That has taken a meaningful amount of oil offline and pushed prices higher.

So what does this mean for investors?

Higher oil prices may cause inflation to jump up again in the short term. But there are also balancing forces: OPEC+ has agreed to boost production, which should help ease price pressure. While we have seen markets overall react negatively to recent events, we feel that the current situation is more of a short term episode of volatility, rather than a deeper structural shift in markets. And while any conflict carries risks, markets tend to settle once the initial uncertainty reduces.

What should you do now?

Situations like this are just another reminder of why diversification is crucial. Our message to investors remains key, a well balanced portfolio with exposure to a mixture of assets that can benefit from inflation, alongside more stable fixed income investments help cushion the impact when global events cause short‑term swings.

The most important thing? Try not to react to headlines. Staying disciplined and keeping focused on long‑term goals has consistently proven more effective than making sudden changes during periods of uncertainty.

We’re monitoring developments closely and working closely with our investment partners, ensuring portfolios remain positioned for clients’ long‑term needs.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.