Geopolitics is once again calling the shots in global markets, and this time, it’s hitting at the heart of the world’s energy lifeline. Rising tensions of the war between the United States and Iran have effectively choked activity through the Strait of Hormuz, the world's most vital artery for global oil and gas flows. With shipments disrupted, investors are bracing for tighter supply, elevated prices, and a fresh wave of volatility rippling across markets. At times like these, history becomes a valuable guide. And analysis from investment firm Schroders highlights an interesting pattern.
In the aftermath of major oil supply disruptions, certain sectors have consistently outperformed. Specifically, energy, consumer staples, healthcare, and utilities have each delivered gains of more than 5% in the 12 months following such shocks. These trends have played out across several major geopolitical events, including the Yom Kippur War in 1973, the Iranian Revolution in 1978, the Iran–Iraq War in 1980, the Gulf War in 1990, and Russia’s War on Ukraine in 2021. The trend underscores a simple dynamic.
