My team and I are aware this is a worrying time with the ongoing situation in the Middle East. Accordingly, I am writing this commentary to provide some context, our approach with regard to dealing with the uncertainty and hopefully to provide reassurance and confidence that your financial plan remains on track.
Further to the extensive US and Israeli attacks on Iran which started on 28 February, as well as a second front in the war in Lebanon between the Iran-backed group Hezbollah and Israel, the Middle East has been thrown into turmoil. Iran in turn has retaliated with drones and missiles against Israel as well as a diverse range of targets in countries including UAE, Kuwait, Oman, Saudi Arabia and Bahrain, Iraq, Turkey and a British military base in Cyprus. The targets have included oil and gas hubs leading to a suspension of production in some cases. Moreover, oil production needs to be scaled back as there is a lack of storage for oil which cannot be transported out of the Gulf region.
Surging Oil Price
Iran has a unique geographic location along the northern shore of the Persian Gulf as it has control of the Strait of Hormuz. This is a pinch point which is just 20 miles wide through which about 20% world oil production has to pass to reach global markets, so it has immense strategic importance. By threatening shipping, Iran has effectively stopped oil tankers from passing through this narrow waterway, as insurance underwriters are unwilling to provide insurance due to the current high risk of attacks. This has resulted in an unprecedented increase in the price of oil and gas in world markets despite initiatives by countries around the world to release surplus oil supplies and an easing of sanctions by the US on Russian energy to help increase supply to satisfy global demand.
Inflation and Economic Risks
Aside from the appalling human cost of any war, the immediate economic concern for markets is the impact on inflation of higher energy costs. In particular, inflation has been falling since the spike in 2022/23 with the Russian invasion of Ukraine and this has enabled central banks to reduce interest rates leading to a strong recovery and good performance in both equity and bond markets. The risk now is that central banks may come under pressure to halt any further interest rate cuts and potentially increase interest rates to control inflationary pressures. In turn, this oil shock would almost certainly hit economic growth and derail economic forecasts. Moreover, with many western governments already managing large debt burdens, higher interest rates would pile more pressure on stretched government budgets.
Global Markets Muted Response
Two weeks into the conflict whilst energy prices have surged, the response in global stock markets has been relatively muted. The US S&P500 is around 3% off its peak but still higher than in November last year. Similarly, the UK FTSE-100 is still above 10,000 today and higher than in January this year. Asian markets have been hit harder though and are around 6-10% lower reflecting their greater dependence on energy imports from the Gulf states.
The resilience of equity markets at the time of writing reflects a view that the war will not last a long time. Indeed, only this week, Mr Trump said the war ‘is very complete, pretty much’ to try and calm investors’ nerves and stabilise global oil markets. However, the US government is giving mixed messages regarding how it sees the way ahead and the timing for the potential end of the war. Mr Trump has been careful not to define his war aims, so he has left himself plenty of wriggle-room to declare ‘victory’ on his terms whenever his chooses. Investors are also conscious that Mr Trump has shown in the past he prefers quick results in a transactional manner, often as in the case of tariffs or foreign policy (such as Greenland) threatening opponents only to grant concessions and then settle (Trump Always Chickens Out, ‘TACO’).
Focus on US Mid-Term Elections in November
Of course, it remains to be seen how Mr Trump plans to extricate the US from his Iran war and when this will be. The US Mid-term elections in November are very important politically for him as they will impact the last 2 years of his presidency. The markets anticipate Mr Trump will be keen to avoid inflationary pressures in the US so the Federal Reserve can cut interest rates and help generate a ‘feel-good’ factor over the summer heading into the autumn; this monetary stimulus would be a welcome addition to the enormous fiscal stimulus of the tax cuts contained in Mr Trump’s ‘Big Beautiful Bill’ last year.
Our Approach as Financial Planners
As financial planners, whilst we cannot predict the future, our expertise is helping clients achieve financial security and navigate uncertainty along the way. Accordingly, our skillset and wide experience ensure we always take account of uncertainty when we build financial plans and advise our clients. This uncertainty includes geopolitical events such as the war in Iran, but also uncertainty as a result of unexpected tax and legislative changes and personal factors such as a client’s future health and longevity.
Diversified Investment Portfolios with a Prudent Medium Term Outlook
As such, our investment philosophy and strategy are designed to provide resilience for our clients’ financial planning. We construct diversified balanced investment portfolios, both geographically and across business sectors with prudent risk management. We like high quality companies with robust earnings and strong balance sheets benefiting from a competitive advantage with their peer group and pricing power to mitigate inflation. Moreover, as patient investors we believe in staying the course during periods of volatility as this discipline helps to compound returns over time and allows us to take advantage of opportunities as they arise.
Keeping the Plan on Track
Whilst both the timing and the terms by which this conflict is resolved are uncertain, our focus remains on our clients and keeping their financial plans on track to ensure financial security over time. We are monitoring developments closely and modelling the diverse range of outcomes with the aim of ensuring we remain on the front foot. On behalf of my team, I hope this commentary provides reassurance at this time and we will provide further updates as appropriate over the coming months.
Matthew Clark, 13 March 2026
Please note that the content on this page is based on our understanding and the available information; we cannot be held responsible for any errors, and you should not act on the basis of the information in these articles, nor do they constitute investment advice. Past performance is not necessarily an indication of future returns; the value of investments and any income from them is not guaranteed and can fall as well as rise. Overseas investments are affected by currency movements and exchange rates. If you would like investment advice on your individual circumstances, please do not hesitate to get in touch via telephone at 01392 875500 or email at info@SeabrookClark.co.uk.
Middle East Conflict 2026
Matthew Clark
My team and I are aware this is a worrying time with the ongoing situation in the Middle East. Accordingly, I am writing this commentary to provide some context, our approach with regard to dealing with the uncertainty and hopefully to provide reassurance and confidence that your financial plan remains on track.
Further to the extensive US and Israeli attacks on Iran which started on 28 February, as well as a second front in the war in Lebanon between the Iran-backed group Hezbollah and Israel, the Middle East has been thrown into turmoil. Iran in turn has retaliated with drones and missiles against Israel as well as a diverse range of targets in countries including UAE, Kuwait, Oman, Saudi Arabia and Bahrain, Iraq, Turkey and a British military base in Cyprus. The targets have included oil and gas hubs leading to a suspension of production in some cases. Moreover, oil production needs to be scaled back as there is a lack of storage for oil which cannot be transported out of the Gulf region.
Surging Oil Price
Iran has a unique geographic location along the northern shore of the Persian Gulf as it has control of the Strait of Hormuz. This is a pinch point which is just 20 miles wide through which about 20% world oil production has to pass to reach global markets, so it has immense strategic importance. By threatening shipping, Iran has effectively stopped oil tankers from passing through this narrow waterway, as insurance underwriters are unwilling to provide insurance due to the current high risk of attacks. This has resulted in an unprecedented increase in the price of oil and gas in world markets despite initiatives by countries around the world to release surplus oil supplies and an easing of sanctions by the US on Russian energy to help increase supply to satisfy global demand.
Inflation and Economic Risks
Aside from the appalling human cost of any war, the immediate economic concern for markets is the impact on inflation of higher energy costs. In particular, inflation has been falling since the spike in 2022/23 with the Russian invasion of Ukraine and this has enabled central banks to reduce interest rates leading to a strong recovery and good performance in both equity and bond markets. The risk now is that central banks may come under pressure to halt any further interest rate cuts and potentially increase interest rates to control inflationary pressures. In turn, this oil shock would almost certainly hit economic growth and derail economic forecasts. Moreover, with many western governments already managing large debt burdens, higher interest rates would pile more pressure on stretched government budgets.
Global Markets Muted Response
Two weeks into the conflict whilst energy prices have surged, the response in global stock markets has been relatively muted. The US S&P500 is around 3% off its peak but still higher than in November last year. Similarly, the UK FTSE-100 is still above 10,000 today and higher than in January this year. Asian markets have been hit harder though and are around 6-10% lower reflecting their greater dependence on energy imports from the Gulf states.
The resilience of equity markets at the time of writing reflects a view that the war will not last a long time. Indeed, only this week, Mr Trump said the war ‘is very complete, pretty much’ to try and calm investors’ nerves and stabilise global oil markets. However, the US government is giving mixed messages regarding how it sees the way ahead and the timing for the potential end of the war. Mr Trump has been careful not to define his war aims, so he has left himself plenty of wriggle-room to declare ‘victory’ on his terms whenever his chooses. Investors are also conscious that Mr Trump has shown in the past he prefers quick results in a transactional manner, often as in the case of tariffs or foreign policy (such as Greenland) threatening opponents only to grant concessions and then settle (Trump Always Chickens Out, ‘TACO’).
Focus on US Mid-Term Elections in November
Of course, it remains to be seen how Mr Trump plans to extricate the US from his Iran war and when this will be. The US Mid-term elections in November are very important politically for him as they will impact the last 2 years of his presidency. The markets anticipate Mr Trump will be keen to avoid inflationary pressures in the US so the Federal Reserve can cut interest rates and help generate a ‘feel-good’ factor over the summer heading into the autumn; this monetary stimulus would be a welcome addition to the enormous fiscal stimulus of the tax cuts contained in Mr Trump’s ‘Big Beautiful Bill’ last year.
Our Approach as Financial Planners
As financial planners, whilst we cannot predict the future, our expertise is helping clients achieve financial security and navigate uncertainty along the way. Accordingly, our skillset and wide experience ensure we always take account of uncertainty when we build financial plans and advise our clients. This uncertainty includes geopolitical events such as the war in Iran, but also uncertainty as a result of unexpected tax and legislative changes and personal factors such as a client’s future health and longevity.
Diversified Investment Portfolios with a Prudent Medium Term Outlook
As such, our investment philosophy and strategy are designed to provide resilience for our clients’ financial planning. We construct diversified balanced investment portfolios, both geographically and across business sectors with prudent risk management. We like high quality companies with robust earnings and strong balance sheets benefiting from a competitive advantage with their peer group and pricing power to mitigate inflation. Moreover, as patient investors we believe in staying the course during periods of volatility as this discipline helps to compound returns over time and allows us to take advantage of opportunities as they arise.
Keeping the Plan on Track
Whilst both the timing and the terms by which this conflict is resolved are uncertain, our focus remains on our clients and keeping their financial plans on track to ensure financial security over time. We are monitoring developments closely and modelling the diverse range of outcomes with the aim of ensuring we remain on the front foot. On behalf of my team, I hope this commentary provides reassurance at this time and we will provide further updates as appropriate over the coming months.
Matthew Clark, 13 March 2026
Please note that the content on this page is based on our understanding and the available information; we cannot be held responsible for any errors, and you should not act on the basis of the information in these articles, nor do they constitute investment advice. Past performance is not necessarily an indication of future returns; the value of investments and any income from them is not guaranteed and can fall as well as rise. Overseas investments are affected by currency movements and exchange rates. If you would like investment advice on your individual circumstances, please do not hesitate to get in touch via telephone at 01392 875500 or email at info@SeabrookClark.co.uk.
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