According to a report by asset management company Pictet Group, recent developments have begun to affect investor confidence.
The war in Iran continues and the situation in the region remains tense, despite previous statements by US President Donald Trump that the operation could be concluded soon. As the days pass and a quick solution is lacking, economic analysts are warning of possible consequences for the global economy, especially due to rising energy prices and uncertainties in financial markets.
According to a report by asset management firm Pictet Group, recent developments have begun to weigh on investor confidence. When geopolitical uncertainty increases, investors become more cautious and often slow down investments. This can also affect the real economy, as businesses may postpone their projects, while consumers may reduce spending.
The current situation is considered by experts to be a “supply shock”, as rising energy prices and disruptions to international trade could put pressure on the global economy. This risk is particularly great for Europe, which is heavily dependent on energy imports.
A key factor in this crisis is the price of oil. Before the conflict, Brent crude was trading at around $72 per barrel, but now the price has risen and in some cases has reached around $100 per barrel. If prices continue to rise, the impact could be felt on economic growth and inflation in many countries, including the United States, the Eurozone and China.
Pictet Group analysts have presented three possible scenarios for the development of the conflict. The first and most likely scenario is that of a limited conflict that could last from two to four weeks and that would have a relatively small impact on the markets. This scenario is comparable to the situation during the 2003 Iraq War, where markets experienced only a brief period of volatility.
The second scenario predicts a regional escalation of the conflict for a period of one to two months. In this case, the price of oil could increase significantly and stock markets could fall. Analysts compare this situation to the crises during the Yom Kippur War and the 1990–1991 Gulf War.
The third and most extreme scenario predicts a protracted global conflict that could last for years and lead to a global recession. In this case, energy prices could rise significantly and financial markets could suffer sharp declines. However, experts estimate that the probability of this scenario is very low.
According to analysts, the most likely development remains a limited conflict with a temporary impact on markets. However, the situation remains unclear and any further escalation of the war in Iran could have significant consequences for global economic stability.