What Happened
On February 28, 2026, the United States and Israel launched coordinated military strikes against Iran. The operation followed months of escalating tensions, including Iran’s violent crackdown on domestic protesters and failed nuclear negotiations. Iran’s Supreme Leader Ali Khamenei was confirmed killed in the strikes. Iran retaliated with missile and drone attacks on Israel and U.S. military facilities across the Persian Gulf.
These are tragic events with enormous human consequences. Our thoughts are with everyone affected. We also know clients are asking what this means for their portfolios. We don’t pretend to know how this conflict will unfold, but history offers useful perspective.
What We Don’t Know
Nobody knows how long this conflict will last, how far it may escalate, or what the full economic consequences will be. This situation is only days old and it may very well last longer and prove more significant than markets are currently pricing in. The range of outcomes is wide, and we are humble about our ability, or anyone’s ability, to predict what comes next.
The death of Supreme Leader Khamenei adds another dimension. Iran has spent decades building and funding a network of proxy groups across the Middle East, including Hezbollah, Hamas, the Houthis, and various militia forces in Iraq and Syria. Killing Iran’s most senior leader may activate these groups, and potentially dormant sleeper cells, to carry out retaliatory attacks on strategic targets in the region (oil infrastructure, military installations, shipping lanes) and possibly civilian targets in Western countries. Iran has already launched strikes across nine countries since the operation began. The risk of further escalation through these proxy networks is real and could introduce volatility that is difficult to anticipate or price in advance.
What we can do is look at how markets have behaved during and after past conflicts. That history does not guarantee anything about this time, but we think it provides valuable context.
What History Suggests: Earnings Drive Markets, Not Geopolitics
Armed conflicts are human tragedies. But the historical record suggests they have had little lasting impact on the long-term earnings power of companies or the multiples investors pay to own them. Stock prices have been driven over time by corporate profits, innovation, and economic fundamentals, not by headlines. Geopolitical shocks cause short-term volatility, sometimes severe. Markets have consistently recovered.
The table below shows how the S&P 500 performed after some of the most significant global conflicts of the past 80+ years. The short-term picture is often painful. But as you extend the time horizon, a clear pattern emerges: markets recovered. This is not a prediction that the same will happen this time, but it is a pattern worth keeping in mind.
Oil Markets: Short-Term Pain Is Possible, but Disruptions Have Normalized Before
The most direct market impact so far has been in oil. Brent crude surged roughly 8-10% on the first trading day after the strikes, reaching the high $70s to around $80 per barrel. That is a big move, but it may only be the beginning. We don’t know how far prices could go from here.
For context, when Russia invaded Ukraine in 2022, Brent crude spiked to roughly $120 per barrel as supply fears gripped markets. We do not think a spike of that size is the most likely outcome this time. The global supply picture is different today and there is meaningful spare capacity available. But we can’t rule it out, particularly if the Strait of Hormuz remains disrupted for an extended period or if proxy attacks damage key oil infrastructure in the Gulf.
That said, it is worth remembering what happened after the 2022 spike: prices came back down. Supply adjusted, alternative sources came online, and demand balanced out. Commodity markets, like stock markets, have a track record of finding equilibrium after shocks, even big ones.
The Strait of Hormuz. About 20% of the world’s oil, roughly 20 million barrels per day, moves through this narrow waterway off Iran’s southern coast. Iran’s Revolutionary Guard has warned ships away, and several tankers have been hit. Major shipping companies and insurers have halted transit, creating a de facto closure even though Iran hasn’t officially sealed the Strait. Many energy analysts think Iran may lack the sustained military capability to keep the Strait fully closed for long against the combined naval power of the U.S. and its allies. But nobody knows that for certain, and even a partial disruption lasting weeks or months could have a real impact on energy prices.
Iran’s Oil Exports to China. Iran produced roughly 4.7 million barrels per day in 2025, with most of its heavily sanctioned exports going to China through a “shadow fleet” of tankers. With those shipments disrupted, China may need to find replacement barrels elsewhere, most likely from Saudi Arabia, the UAE, Russia, and other producers. This reshuffling could push prices higher in the near term. OPEC+ does hold significant spare capacity, and Saudi Arabia has contingency plans to route oil through its East-West pipeline to the Red Sea, bypassing the Strait. But how quickly any of this adjusts remains uncertain. The global oil market is far more diversified today than it was during the 1973 embargo, which is the only geopolitical event in the modern era that caused lasting damage to stock returns. Still, this is a developing situation and we are watching it closely.
The Bottom Line
This situation could get worse before it gets better. We could see more volatility, higher oil prices, and a conflict that lasts longer and matters more than anyone currently expects. The possibility of retaliatory attacks by Iran’s proxy network, whether targeting energy infrastructure in the Gulf or civilian sites in Western countries, adds unpredictability that markets have not fully accounted for. We do not have a crystal ball.
What we do have is 80+ years of data. Geopolitical crises, including conflicts much larger than this one, have not permanently derailed corporate earnings or stock markets. Oil price spikes, even severe ones, have come back down. Markets have recovered. Every time. Over the long run, stock prices are driven by the ability of companies to grow their earnings and the multiple investors pay for those earnings. Wars and conflicts, as consequential as they are for the people involved, have had little lasting impact on either.
The U.S. economy continues to show strong growth, and the fundamentals that drive long-term portfolio performance remain intact. The best course of action, as it has been through every past crisis, is to stick with your financial plan. If you have questions or want to revisit your plan in light of current events, please reach out. We are here for you.
Disclosures
This material is provided by Gryphon Financial Partners, LLC (“Gryphon”) for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Facts presented have been obtained from sources believed to be reliable. Gryphon, however, cannot guarantee the accuracy or completeness of such information. Gryphon does not provide tax, accounting or legal advice, and nothing contained in these materials should be taken as tax, accounting or legal advice. Individuals should seek such advice based on their own particular circumstances from a qualified tax, accounting or legal advisor.