Analysts tracking markets and energy flows say investors have so far been willing to look past concerns about an oil shock, as headline equity benchmarks push higher and gas prices have not surged beyond historic peaks.
"Oil prices haven’t spiked as much as expected, and the U.S. economy remains resilient, hitting record highs this week," said Dennis Kissler of BOK Financial.
Equity indexes have benefited from this resilience. The S&P 500 and the Nasdaq are positioned for their best April since 2020, while the S&P 500 and the Dow are on track for their best month since 2020 - trends analysts say reflect strong corporate earnings that have reassured investors even as the region faces oil supply disruptions.
Why markets are tolerating the shock
Several analysts point to the idea that the global oil pipeline has not been as badly disrupted as many feared in the early stages of the conflict. TankerTrackers.com reported that Iran shipped at least 11.7 million barrels of crude through the Strait of Hormuz in the initial weeks, all bound for China, a flow that suggests oil movements have continued despite geopolitical tensions.
JPMorgan analysts summarized the situation this way: "This year’s closure of the Strait of Hormuz has produced an immediate supply contraction, which our commodity analysts’ estimate has removed more than 10% of global crude oil supply. Despite this unprecedented shortfall, Brent April crude oil prices are up a relatively modest 43% from their one-year trailing average."
Kepler data cited in market commentary shows Iran’s oil exports rose in the conflict’s first weeks, reaching 55.22 million barrels from March 15 to April 14, during a period when crude prices remained above $90 per barrel.
Kissler noted additional offsets to a full-blown supply crisis: "The Strait of Hormuz accounted for about 20% of global oil needs, but workarounds like Saudi pipelines, increased U.S. and South American exports, and demand destruction in Europe have helped offset some supply loss." He added that, "Just three months ago, global supply exceeded demand by 2 million barrels a day. The oil is there - it just needs to move."
Price forecasts and investor stance
Despite the mitigating factors, some banks still expect oil to remain elevated near term. JPMorgan noted: "Brent crude oil prices are projected to average $100/bbl this quarter but remain elevated for several months as buffer stocks are replenished, energy infrastructure takes time to repair, and geopolitical risk premia linger. In this scenario, prices settle at $80/bbl in 4Q26."
Investors have been anchoring on corporate earnings and overall economic momentum rather than solely on geopolitics. That approach has supported gains across major U.S. indices even as energy markets adjust.
Macro backdrop in the U.S.
U.S. economic growth accelerated in the first quarter, driven in part by increased investment in AI and a rebound in government spending. Government spending rose 4.4%, with federal outlays up 9.3%, while inventory accumulation also supported growth. At the same time, imports related to AI equipment expanded, widening the trade deficit and subtracting 1.3 percentage points from GDP growth in the quarter.
Nonetheless, analysts warn that inflationary pressure tied to the Iran conflict is eroding household purchasing power, and that any clear evidence that the war is denting growth could prompt a sharp market reappraisal. To date, that reappraisal has not materialized among market participants.
Bottom line
For now, markets are finding reasons to look beyond the immediate oil supply disruption: corporate earnings, alternate supply routes and continued flows of crude have kept price moves more muted than some feared. Still, analysts and investors remain attentive to how sustained higher energy prices, wartime costs and the pace of infrastructure repair might influence inflation and growth in the months ahead.