Lead
On Feb. 28, 2026, the U.S. announced it had launched “major combat operations” in Iran, after strikes that Iranian sources say hit several ministries in southern Tehran. Markets around the world moved into risk-off mode as investors weighed potential disruption to oil flows and regional trade routes. Analysts warn the economic consequences could exceed those tied to recent events in Venezuela because Iran sits astride a key energy chokepoint. Early trading indicators pointed to sharper oil price responses, stronger demand for safe-haven assets and heightened currency volatility.
Key Takeaways
- U.S. President Donald Trump said U.S. forces began “major combat operations” in Iran on Feb. 28, 2026; Iranian officials reported strikes on ministries in southern Tehran (Reuters).
- Market strategists expect a stronger oil reaction than the Venezuela episode: Iran affects a chokepoint, not just production; about 13 million bpd transited the Strait of Hormuz in 2025 (Kpler), roughly 31% of seaborne crude flows.
- Venezuela currently produces ~800,000 bpd, versus a 1990s peak near 3.5 million bpd, limiting its global crude market impact relative to Iran.
- Analysts forecast a potential equity sell-off of 1%–2% (or more) at the open, U.S. Treasury yields falling several basis points, and oil rising 5%–10% in initial reactions, depending on escalation (Natixis, market strategists).
- Market reaction will hinge on duration: a short, contained campaign could produce a brief spike; a protracted three-to-five-week conflict or attempts to close the Strait of Hormuz would drive far larger, sustained market moves (Quantum Strategy).
- Safe-haven flows are likely to benefit the U.S. dollar, the Japanese yen and gold, while high-beta and cyclical sectors may suffer the most in the near term.
Background
Over recent years markets have absorbed multiple geopolitical shocks while pricing in higher policy uncertainty: tariff changes, sanctions, and regional flare-ups have been factored into valuations to varying degrees. President Trump’s administration announced a tariff increase to 15% on all imports and executed high-profile actions such as the capture of former Venezuelan President Nicolás Maduro, adding to a backdrop of policy-driven market moves. Still, many investors treated those episodes as discrete supply or credit events rather than threats to major shipping lanes.
Iran’s strategic importance differs fundamentally from Venezuela’s. Venezuela is a production story—its heavy, sour crude historically mattered for specific refinery complexes—whereas Iran sits next to the Strait of Hormuz, a maritime bottleneck that channels a significant share of global seaborne oil. Disruption there would affect prompt supply and shipping logistics across Asia, Europe and the Americas, magnifying the potential economic spillover.
Main Event
On Feb. 28, 2026, U.S. officials publicly stated that the military had initiated “major combat operations” in Iran; Iranian sources told Reuters that several ministries in southern Tehran were struck. The White House framed the action as a targeted campaign; the administration has not given a detailed operational timeline. Markets reacted overnight and in pre-market trading, with traders pricing in risk-off moves ahead of full-session liquidity.
Dealers and portfolio managers reported immediate positioning toward liquidity and lower risk exposure. Commodity desks pushed bid prices for Brent and other benchmark barrels higher in thin Asian hours, while fixed-income traders increased purchases of U.S. Treasuries. Currency desks saw flows into traditional safe havens, and implied volatility in equity options markets rose across major indexes.
Officials and strategists emphasized two variables for market outcomes: whether Iran attempts to close or threaten the Strait of Hormuz, and whether the U.S. operation remains narrowly focused or expands into a longer regional campaign. If the strait remains open and attacks are contained, market responses could be short-lived. If shipping lanes are threatened, supply disruptions would be immediate and widespread.
Analysis & Implications
Oil markets are likely to be the first and most sensitive transmission channel. Because about 13 million barrels per day transited the Strait of Hormuz in 2025—around 31% of global seaborne flows—a real or perceived risk to that route amplifies price responses compared with isolated production losses. Traders tend to front-run physical tightness, so futures, spot differentials and freight costs can move sharply in the opening days.
Equities typically follow a risk-off script: higher uncertainty boosts demand for sovereign paper and precious metals while compressing valuations in cyclical, energy-importing economies. Natixis and other forecasters suggested global equities could open down 1%–2% or more, with U.S. Treasury yields falling 5–10 basis points as investors seek safety. The magnitude will depend on headline developments and whether supply chains are disrupted.
Duration matters more than headline severity. A short, contained operation that avoids major shipping interruptions would likely produce a temporary shock and quick front-running of relief trades. By contrast, a multi-week campaign or expanded retaliation that raises the odds of a broader regional conflict would require markets to price in sustained higher energy costs, insurance premiums for shipping, and potential growth downgrades for energy-dependent economies.
Regional effects will differ: Asian markets, which rely heavily on oil and liquefied natural gas shipments through the Middle East, face outsized exposure to sustained disruptions. Higher fuel costs and logistical constraints would weigh on manufacturing and trade flows, potentially pressuring growth in export-led economies and pushing central banks to reassess near-term policy stances.
Comparison & Data
| Metric | Venezuela (recent) | Iran / Strait of Hormuz (2025) |
|---|---|---|
| Daily crude output | ~800,000 bpd | — (Iran national output not primary comparison) |
| Peak/Context | 3.5 million bpd (1990s peak) | 13 million bpd transited Strait of Hormuz (2025) |
| Share of seaborne flows | — | ~31% of global seaborne crude flows (2025, Kpler) |
The table highlights why strategists view the Iran episode as a chokepoint risk rather than a single-country production shock. Venezuela’s impact was concentrated through its output; by contrast, disruptions around Iran threaten maritime routes that carry a large share of global seaborne oil, with immediate consequences for shipping costs, freight routes and insurance.
Reactions & Quotes
“This has definitely bigger ramifications than Venezuela,”
Florian Weidinger, CIO, Santa Lucia Asset Management
Weidinger noted that Venezuela mainly affected specialized heavy crude markets, while Iran’s proximity to shipping lanes raises the risk of a broader oil price reaction.
“That is the pattern markets will reference on Monday,”
Kenneth Goh, Director, Private Wealth Management, UOB Kay Hian
Goh pointed to the June 2025 example when markets sold off at the open after strikes on Iranian nuclear sites but recovered once the Strait of Hormuz remained open.
“Investors should wait for Iran’s response; no hero bets,”
Alicia García-Herrero, Chief Economist, Asia-Pacific, Natixis
García-Herrero warned against early speculative positioning and recommended observing the evolving tactical situation before adding risk exposure.
Unconfirmed
- Whether the U.S. strikes constitute a limited, short-term campaign or will expand into a prolonged operation remains unconfirmed and will materially shape market outcomes.
- Reports that specific ministries in southern Tehran were hit come via unnamed Iranian sources reported by Reuters; independent verification of targets and damage remains pending.
- Any imminent Iranian plan to close or directly obstruct the Strait of Hormuz has not been officially confirmed by Iranian authorities at the time of this report.
Bottom Line
The market impact of the Feb. 28, 2026 U.S. strikes on Iran will be determined primarily by how long the military campaign lasts and whether maritime routes such as the Strait of Hormuz are threatened. A contained, short-duration action could lead to a sharp but transient spike in oil and risk-off moves; a sustained regional conflict would force a re-pricing across commodities, bonds and equities.
Investors should monitor three near-term indicators: statements from U.S. and Iranian officials about operational scope, shipping and insurance notices for the Strait of Hormuz, and early price action in oil, sovereign bonds and currency safe havens. Those signals will guide whether the episode becomes an episodic shock or a catalyst for broader market repricing.
Sources
- CNBC (news media report summarizing markets and expert commentary)
- Reuters (news agency reports citing Iranian officials on targets in Tehran)
- Kpler (market intelligence on 2025 seaborne crude flows)
- AFP / Getty Images (photo attribution for Tehran explosion imagery)