Global financial markets are showing signs of stabilization following months of acute volatility that accompanied the 2026 Iran conflict and Operation Epic Fury, according to market participants and analysts. While a fragile ceasefire implemented in mid-April has moderated several of the most dramatic swings, key market drivers remain unsettled and could reassert pressure on asset prices.
Energy markets led the turmoil. Brent crude registered the most pronounced market response to the conflict. The near-closure of the Strait of Hormuz produced a severe supply shock for global energy markets, a development the International Energy Agency has said could limit oil availability for months even after transit through the waterway resumes. Brent prices jumped from roughly $73.50 per barrel before the fighting to about $120 at the peak in early March, a surge of nearly 64% driven by concerns over supply disruptions and the effective closure of the key oil transit route.
Beyond crude, the crisis prompted atypical behavior in traditional safe-haven assets. Gold, typically sought for stability, initially fell nearly 25% as investors drew liquidity into the US dollar. The precious metal later rallied sharply, climbing above $4,800 during a period of intensified military strikes in early April, illustrating how liquidity dynamics and risk-off flows can produce counterintuitive moves in safe-haven instruments.
Currency markets also reflected the shock. The US Dollar Index strengthened during the conflict’s most volatile phase as market participants sought the world’s reserve currency for safety. By late April, however, the dollar had retreated toward pre-war levels as sentiment shifted toward risk-sensitive assets amid hopes that the ceasefire would hold.
Market commentators at OANDA have framed current conditions as conditional: if the ceasefire endures, recovery in risk assets may continue, although structurally higher oil prices could persist because of sustained increases in shipping and insurance costs. Conversely, if the ceasefire breaks down, renewed military escalation could drive oil prices higher again and prompt renewed demand for safe-haven assets such as the US dollar.
Analysts note that the medium-term trajectory for markets will hinge on two related variables: the durability of the ceasefire and continued access to the Strait of Hormuz. Reflecting these concerns, the U.S. Energy Information Administration projected Brent crude to average around $115 per barrel during the second quarter of 2026 before easing later in the year.
Cryptocurrency markets, which suffered heavy outflows early in the year, have shown resilience during the recovery phase. Bitcoin rebounded from earlier losses and had gained roughly 18% by late April, benefitting from renewed investor interest in decentralized assets as peace talks advanced. Observers pointed out that Bitcoin outperformed many traditional currencies during the initial stages of the market rebound.
Lingering effects and near-term outlook. Even if broad market panic has subsided, analysts warn that the conflict’s economic aftershocks are likely to persist. Disrupted supply chains, elevated energy costs and ongoing geopolitical uncertainty are expected to continue shaping financial conditions for months, according to Moheb Hanna, an analyst at OANDA. These structural pressures could influence corporate margins, trade flows and the cost of goods and transportation.
Key takeaways:
- Energy markets were hit hardest by the conflict, with Brent crude spiking by nearly 64% to about $120 per barrel in early March.
- Safe-haven dynamics produced large swings in gold and the US dollar, with the dollar initially strengthening then retreating toward pre-war levels by late April.
- Cryptocurrencies recovered from early-year losses, with Bitcoin gaining around 18% by late April.
Outlook and risks:
- If the ceasefire holds, markets may continue to recover, though sustained shipping and insurance cost increases could keep oil prices structurally above pre-conflict levels.
- If the ceasefire fails, renewed military escalation could trigger another wave of oil-price volatility and safer-asset flows into currencies such as the US dollar.
- Ongoing supply-chain disruptions and higher energy costs remain potential headwinds for global markets and corporate margins in the months ahead.