How Geopolitical Conflict and Long-Term Investing Intersect: The Iran Situation
Ryan Salah, CFP ® , CPWA ®
March 2, 2026
As widely reported, the U.S. and Israel have launched military strikes against Iran, targeting its leadership, military assets, and nuclear infrastructure. Iran’s Supreme Leader is confirmed to have been killed, and Iran has retaliated with missile and drone attacks across the Middle East.
President Trump has stated that the goal of the operation, dubbed "Operation Epic Fury," is regime change in Tehran, with strikes expected to continue for weeks and a number of U.S. troop casualties already reported.
The situation is developing quickly, and the safety of civilians and troops in the region remains the foremost concern. That said, investors will understandably have questions about what this means for markets, energy prices, and their portfolios. History offers a useful guide: while specific geopolitical events are impossible to predict, their occurrence is not. Well-constructed portfolios and sound financial plans are designed precisely to weather this kind of uncertainty.
The current strikes are the latest chapter in a long-running story
Although the scale of the current operation is significant, U.S.-Israel-Iran tensions have been building for years. This latest escalation follows a monthlong U.S. military buildup in the region, failed nuclear negotiations, and President Trump’s earlier pledge to support Iranian protesters who challenged the regime.
Tensions stretch back decades, including Iran’s support for Hezbollah and Hamas, the 2019 drone strikes on Saudi oil infrastructure, Hamas’s October 2023 attack on Israel, and last summer’s 12-day Israeli military campaign directly targeting Iran’s nuclear and ballistic missile programs.
While the targeting of Iran’s senior leadership marks a broader scope than previous engagements, history also demonstrates that geopolitical conflicts are not always a lasting catalyst for market movements.
Oil prices and the Strait of Hormuz
The most direct channel through which Middle East conflicts affect financial markets is global energy prices. Iran produces around 3 million barrels of oil per day and 27 billion cubic feet of natural gas per day, and it sits along the Strait of Hormuz—the world’s most critical energy waterway. According to the U.S. Energy Information Administration, approximately one-third of all seaborne oil exports and one-fifth of natural gas passes through this region. Oil prices had already been rising ahead of the strikes, and the immediate reaction pushed WTI to the low $70s and Brent crude to just under $80 per barrel.
Current prices remain well below the 2022 peak of nearly $128 per barrel seen when Russia invaded Ukraine. Since 2018, the U.S. has been the world’s largest producer of oil and natural gas, with domestic output exceeding that of Saudi Arabia and Russia—providing meaningful insulation from supply disruptions. Additionally, oil prices are notoriously difficult to predict; after Russia’s invasion of Ukraine, prices stabilized and declined far sooner than many expected. The U.S. operation in Venezuela earlier this year similarly produced only a brief move in energy prices with little lasting impact.
The case for staying invested during geopolitical uncertainty
For long-term investors, the most enduring lesson from past geopolitical events is the value of remaining invested. From World War II to the Gulf War to the conflicts in Iraq and Afghanistan, markets experienced short-term volatility but were ultimately driven by economic fundamentals over time. More recently, the Russia-Ukraine and Israel-Hamas conflicts created uncertainty without derailing the broader market trajectory. It is also worth noting that Iran plays a minimal direct role in most investment portfolios, given years of heavy sanctions and an economy marked by hyperinflation and a collapsing currency, the Rial.
Markets may experience volatility in the coming weeks as events develop, and oil prices could move higher. However, attempting to time these moves has historically proven counterproductive. Missing even a handful of the best trading days can significantly reduce long-term returns, underscoring the importance of maintaining a disciplined, long-term approach.
The bottom line? The U.S. and Israeli strikes on Iran represent an important geopolitical development. However, history shows that investors who maintain diversified portfolios aligned with their long-term financial goals are best positioned to navigate periods of uncertainty.