Investors last week seemed to be betting that the United States would hold off on directly attacking Iran. Now, after the weekend’s US airstrikes and Trump's push for a ceasefire, are all parties really ready to cease hostilities? Or is this just the start of a regional war in the Middle East that could severely disrupt oil supplies and spark a surge in the crude price? Our team assesses the latest developments on the ground and consider the vulnerabilities of the major economic regions should the worst occur and the price of oil skyrocket.

Sound strategy matches clearly defined ends with practical ways to achieve them using the means available. By this standard, the strategy behind Israel’s unilateral attacks on Iran was unsound, says Tom Holland. Tom Miller assesses developments in Iran for the “axis of resistance” led by China and Russia, or what he dubs the axis of bystanders.

Any remaining hopes for sub-US$60/bbl oil prices this year must now be buried. Israel’s attacks early Friday against Iran, directed against nuclear facilities, missile sites and senior personnel, are a marked departure from earlier exchanges between the two Middle Eastern powers. For businesses and investors, the immediate consequence will be a higher geopolitical risk premium in financial markets, and especially in energy markets.