Article
Aberdeen MPSOil prices rise and markets react: What this means for you
Senior Investment Manager, Eric Louw, discusses how rising oil prices and geopolitical tensions are influencing global markets and investor sentiment.
Author
Eric Louw
Senior Investment Manager
Duration: 3 Mins
Date: 09 Mar 2026
Over the weekend, Mojtaba Khamenei was announced as Iran’s new supreme leader. As the son of the late leader and someone closely linked to the Islamic Revolutionary Guard Corps (IRGC), his appointment likely indicates the Iranian regime will remain unwilling to compromise with the US in the near term.
At the same time, oil prices have risen above $100 per barrel for the first time since 2022, as the conflict in the Middle East enters its tenth day. Tensions in the region are affecting critical energy facilities and shipping routes, with tankers slowing or halting transit through one of the world’s most important oil corridors.
How have markets reacted?
Financial markets have been unsettled by rising oil prices and the potential impact on global growth. Declines are broadly in line with what we would have expected given the magnitude of events, with the figures below reflecting market performance over the week to 6 March 2026, with further losses being recorded today:
- Global equities suffered losses of around 2.7% last week, there was some notable dispersion between regions.
- European and Asian equities were down 7.2% and 5.6%, respectively (in sterling terms), reflecting their greater dependence on energy imports.
- US equities fell less than 1.5%, supported by demand for perceived safe haven assets and a stronger US dollar.
(Source: Bloomberg, as at 6 March 2026)
Overall, markets are responding to concerns about supply disruption, inflation pressure and how these developments may affect the global economy.
What are the potential implications?
Rising inflation concerns
A sustained rise in oil prices feeds into headline inflation. Higher energy costs can lift inflation expectations globally, while central banks typically “look through” temporary spikes, prolonged disruption could complicate the path toward disinflation.
Risks to economic activity
Oil above $100 per barrel increases transport, manufacturing and logistics costs for businesses worldwide. Shipping delays and rerouting, already visible in the region, can add another layer of pressure to supply chains. These factors may weigh on consumer spending and business confidence if sustained.
What to watch from here
A few factors will determine how this situation develops:
- Ongoing accessibility of the Strait of Hormuz, where around a fifth of the global crude oil normally passes daily.
- Any direct damage to major energy infrastructure in the Gulf region.
- Any response from members of the International Energy Agency to ease supply constraints by releasing strategic oil reserves.
- Central bank responses and whether policymakers maintain a focus on underlying inflation.
What it means for investors
Periods of geopolitical shock can be unsettling, and market moves can feel dramatic in the short term. However, history shows that these episodes are usually temporary rather than transformational.
All Aberdeen MPS portfolios remain well diversified across asset classes, regions and currencies. This diversification is designed to help cushion short-term volatility and protect capital when markets react sharply to geopolitical events.
Where appropriate, our tactical positioning, such as increased exposure to shorter-dated government bonds, offer an additional buffer during periods of risk aversion and rising uncertainty.
While markets may remain volatile in the short-term, we believe the most effective approach for long-term investors remains unchanged:
- Stay invested,
- Stay diversified, and
- Stay focused on long-term objectives
We will continue to monitor developments closely and will update you as the situation evolves.
Find out more about how Aberdeen MPS can support your adviser firm.
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