Geopolitical tensions between Israel and Iran have reached a boiling point, with Iran’s recent missile strikes on Israeli territory marking a dangerous escalation. The situation is further complicated by Israel’s advances against Hezbollah and Hamas, leading to increased hostilities.
Iran’s actions are believed to be driven by internal crises, with the regime using external military force to maintain power. Israel, on the other hand, faces threats from multiple fronts, leaving little room for de-escalation.
Analysts predict various scenarios for escalation, including conflicts between Israel and Iranian proxies in Lebanon, direct conflicts between Israel and Iran, and even the possibility of global economic ramifications, especially in oil markets.
The worst-case scenario involves a disruption of critical oil supplies if Iran closes the Strait of Hormuz, triggering a global energy crisis. While the chances of escalation are high, there is still hope for a lasting truce, though unlikely given the complex regional dynamics.
Market implications are already being felt, with oil prices rising by 10% since the October missile strikes. Investors are advised to hedge by acquiring oil-related assets outside the Middle East to benefit from higher prices and reduce exposure to the conflict.