Around 20 million barrels of oil a day, roughly a fifth of global consumption, pass through the Strait of Hormuz. When tensions involving Iran, Israel and the United States escalated this March, that single fact drove much of the market reaction.
Brent crude surged, briefly moving above $115 to $119 a barrel before easing. Tanker insurance costs and shipping rates in the Gulf rose significantly as insurers priced in the added risk. Oil reached multi-year highs and then partly retreated as investors judged how much supply might actually be lost.
Why oil moves everything
The strait links exporters including Saudi Arabia, Iran, Iraq, Kuwait and the United Arab Emirates with buyers, Asia above all. Even the perception of disruption can lift prices and stir volatility, according to a note prepared on March 10, 2026 by Mauro De Santis Bo, senior partner at GSB Capital. Higher energy prices feed into inflation expectations, growth forecasts and corporate profits, which is why events in the Gulf tend to ripple across many asset classes at once.
What the history shows
De Santis Bo points to S&P 500 data from 1928 to 2024 from Bloomberg and Refinitiv. Geopolitical conflicts have usually brought short-term volatility, he writes, but they rarely change the long-term direction of equity markets. Economic growth and corporate earnings have done that work.
His warning is about what investors do in the middle of a scare. When markets drop and headlines pile up, the instinct is to sell into cash and wait. That calls for two correct predictions, when to get out and when to get back in, and both are very hard to make. Some of the strongest recoveries have come close to the worst declines, and missing even a small number of the best days has historically cut long-term returns.
His answer is to stay invested across market cycles, keep a diversified portfolio so that no single event dominates results, and ignore efforts to forecast geopolitics. The goal, he writes, is to build portfolios able to withstand such shocks. He had made similar arguments in earlier pieces on trade shocks and tariffs.
The note is general commentary from GSB Capital, a firm registered in the Dubai International Financial Centre, and it carries the usual disclaimer that it is not financial advice and that investments can fall as well as rise.
