What are the long-term implications of the Iran war?

The ceasefire in the Middle East has halted active fighting, but lasting damage to oil and gas infrastructure means supply disruptions and elevated risk premia are likely to persist for years. As capital flows shift away from the region, Gulf economies may see softer property markets and a greater focus by sovereign wealth funds on domestic stabilization rather than overseas deployment. For Asia, renewed concerns over energy security should support continued coal use, faster adoption of nuclear and renewables, and larger strategic stockpiles as insurance against future shocks.

Europe faces an added competitiveness challenge as it competes with Asia for scarcer gas supplies, keeping energy prices higher for longer and weighing on growth and disinflation. Against this backdrop of geopolitical tension and energy realignment, investors may need to navigate weaker private investment cycles, tighter fiscal space, and a more volatile macro environment when positioning portfolios.