19 March 2026
If you are covering the latest developments in the Middle East, rising oil and gas prices and the impact on financial markets, please find below a comment from Stuart Clark, portfolio manager at Quilter:
“With events escalating in the Middle East once more, following attacks on both Iranian and Qatari gas fields, it is clearly taking longer than President Trump would have liked to fulfil his aims and does not seem to be leading to the popular uprising that he and Israel desired. The constantly shifting objectives of the campaign are not helping ascertain what will provide the off-ramp for Trump to be able to declare success; worse, is it seems in Iran's rulers’ interests to prolong the war rather than look for de-escalation. Energy prices have spiked once more and are risking becoming entrenched, even if some form of de-escalation can take place.
“Equity indices had been more sanguine than one would expect in this environment, although dispersion by sector is greater and volatility has certainly picked up. Indeed, today’s moves suggests markets may be waking up to the fact that a prolonged energy crisis is now the more likely scenario. Bond markets have been quicker to price in inflationary risk with expected rate cuts being pushed back or entirely priced out.
“This heightened level of volatility will likely be maintained given the uncertainty to the duration of the war or the endgame. If de-escalation were to start today then the energy price would move lower but not to the pre-war levels as the impact on production ability and distribution is still significant. The attack yesterday on LNG plants significantly increases the risk of sustained higher energy prices and the longer the blockade of the Strait of Hormuz the greater the impact on other industries such as fertilisers and petro-chemicals which will lead to a more significant supply side shock.
“In this environment it is critical that investors understand their exposure to the Middle East as well as understand what will perform well or badly in a sustained oil price increase alongside an equity market and bond market sell off. The focus remains on broad diversification within equities and adding defensive assets, such as alternatives, to help adapt portfolios for changes to the outlook.”
