The coordinated attack on Iran by US and Israeli forces - Operation Epic Fury - has disrupted global order since the end of World War 2 and opened a new phase of politics, not only in the Middle East, but also between international allies and opponents.
Market and investor reactions will need to be monitored this week.
Short selling in the Middle East
Stock markets across the Middle East are under pressure from March 1. In the first trading session since the attack on Iran, the Tadawul index of Saudi Arabia, the Muscat index of Oman and the trading floor of Bahrain were all in red, while many other markets in the region did not open. The impact is expected to spread throughout global markets.
Oil market
The oil market will be the focus of volatility after the attacks. Traders predict Brent oil prices will soar above 80 USD/barrel, according to Verisk Maplecroft. This prospect is made despite OPEC's recent decision to increase production sooner and more than previously planned.
Interruption at the Strait of Hormuz
Oil price volatility will be worse due to the closure of the Hormuz Strait. Global shipping companies, including Maersk, MSC, Hapag-Lloyd and others, have suspended all ships passing through this vital shipping route until further notice.
The Iranian Islamic Revolutionary Guard Corps announced that it had attacked several oil tankers in the Gulf region in retaliatory attacks. It is still unclear when the Strait of Hormuz will reopen. Some ships have to divert transportation around Africa, increasing the time and cost of shipments.
Aviation falters
Air travel has been seriously disrupted, with most of the airspace in the Middle East region closed since the attacks began.
More than 1,500 flights were canceled throughout the region on March 1, while flight tracking website FlightAware said more than 19,000 flights were delayed globally. Airlines are expected to continue to face pressure as airlines strive to reopen routes and arrange repatriation flights.
Artificial intelligence and Iran
The attacks also coincided with the market's increasing focus on artificial intelligence (AI). Investors have focused on the potential of AI in reshaping industries around the world. CNBC pointed out that although this topic is not directly related to events in Iran, it actually still has an impact.
According to Axios news reports, the US military used Anthropic's Claude AI technology to support the attack on Iran, even though the company was blacklisted by the Pentagon for its use of the technology. Anthropic protested the Pentagon's request to allow unrestricted use of Claude for military purposes and the Pentagon labeled the company as "supply chain risk" due to that dispute.
Forecast of further developments
What will happen this week is still unclear. President Donald Trump once revealed that US military operations in Iran are exceeding schedule. In a market affected by instability, unknown things will worry investors.
