A Growing Number of Economists and Investment Experts are Warning that Global Financial Markets Could Face a Major Shock if the War Involving Iran, Israel and the United States Escalates Further
By Jamie Mcintyre
A growing number of economists and investment experts are warning that global financial markets could face a major shock if the war involving Iran, Israel and the United States escalates further.
For Australians, the stakes are huge.
Australia’s superannuation pool is worth about $4.5 trillion, with roughly $800–$900 billion invested in US assets, including shares. Any major market collapse could wipe tens of billions of dollars from retirement savings almost overnight.
⛽ Oil shock risk
A key concern is whether the conflict disrupts shipping through the Strait of Hormuz, a critical global oil route.
If the strait closes, analysts warn oil prices could surge above $100 per barrel, pushing fuel costs higher worldwide and potentially triggering stagflation — rising prices combined with weak economic growth.
Credit crisis warning
Experts are also raising concerns about the fast-growing private credit sector, sometimes called “alternative asset lending”.
The recent collapse of Market Financial Solutions in the UK has intensified fears that a broader credit squeeze could spread through financial markets.
If a credit crisis combines with surging energy prices, analysts say it could create the kind of financial shock last seen during the Global Financial Crisis.
Share market risks
Investment strategists say global share markets were already vulnerable before the conflict.
Some analysts warn stocks could fall up to 15%, potentially wiping billions from Australian super accounts.
Fear and opportunity
Markets are now swinging wildly between fear and greed, with sudden crashes and rebounds becoming more common.
While the outlook is uncertain, some veteran investors believe that if markets plunge further, it could eventually create once-in-a-generation buying opportunities.
For now, though, experts say one thing is clear: there is nothing safe or certain about the outlook for global share markets.
