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Shaia Hosseinzadeh bet that a war in the Middle East would upend global markets.

This was the week his wager paid off.

His OnyxPoint Global Management had already been snapping up shares in liquefied natural-gas companies, rare-earth firms and energy producers when missiles and drones started to fly to and from Iran. Wall Street’s initially sanguine response to conflict, Hosseinzadeh said, “gave us more conviction to lean in to the trade.”

Just last month, when the hedge fund founder was discussing opportunities and risks ahead with investors at the Ritz-Carlton South Beach in Florida, U.S. oil prices had largely languished below $65 a barrel for months. Some forecasters projected more declines to come, leaving oil bulls on the outside looking in. But as U.S. warships massed near the Middle East and rumors swirled of huge trades for pricier oil, Hosseinzadeh saw one risk that loomed large.

All hail the new king of packages. 

For the first time in history,

FedEx

FDX

-0.41%

decrease; red down pointing triangle eclipsed United Parcel Service UPS -0.69%decrease; red down pointing triangle this week in market capitalization, a sign of how much Wall Street is rewarding the delivery giant that can shrink the fastest to boost profits.

This article was written by

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Lawrence Fuller is the Principal of Fuller Asset Management (FAM), a state registered investment adviser. He is also the manager of the Focused Growth portfolio on the copy-trading platform Dubapp.com. Information presented is for educational purposes only intended for a broad audience. The information does not intend to make an offer or solicitation for the sale of purchase of any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. FAM has reasonable belief that this marketing does not include any false or material misleading statements or omissions of facts regarding services, investment, or client experience. FAM has reasonable belief that the content as a whole will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances or market events, nature and timing of investments and relevant constraints of the investment. FAM has presented information in a fair and balanced manner. FAM is not giving tax, legal, or accounting advice.
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Oil prices have surged sharply in recent days, with some analysts warning that Brent crude could climb to $150 per barrel if the Strait of Hormuz remains closed for a prolonged period amid the escalating Iran–Israel conflict. After a sharp selloff last week, Indian equities may face further valuation pressure in the near term due to heightened volatility, analysts said.

Crude oil prices crossed the key psychological mark of $100 per barrel last week, the first time since Russia’s invasion of Ukraine in 2022. Despite attempts by the US administration to reassure markets, the conflict in the oil-rich Middle East continues to intensify.

Iran has warned that oil prices could surge to as high as $200 per barrel if the conflict escalates further. Mojtaba Khamenei, Iran’s new supreme leader and son of Ayatollah Ali Khamenei, described the Strait of Hormuz as a strategic “tool of pressure” that must remain shut during the conflict. In a message aired on state television, he also warned that US military bases across the region could face attacks as Iran seeks retaliation for casualties from the conflict.

Oil prices have risen amid growing expectations that the Strait of Hormuz may remain shut, disrupting global energy trade. The narrow 33-km waterway connecting the Persian Gulf and the Gulf of Oman carries more than 20% of the world’s oil and gas shipments, making it one of the most critical chokepoints in global energy markets.

What lies ahead for oil prices

Global crude oil prices could rise to $120 per barrel in the near term and potentially reach $150 per barrel if the war continues for over a month and geopolitical tensions remain elevated in West Asia, said Kayanat Chainwala, Assistant Vice President at Kotak Securities.

“Any prolonged disruption to this trade route will be bullish for crude oil and negative for other commodities, as it fuels inflation concerns and could delay interest rate cuts,” Chainwala said.
A report by Nuvama also noted that crude prices could climb to $150 per barrel if the Strait of Hormuz remains closed for four to eight weeks. However, such extreme price levels could eventually lead to demand destruction and trigger alternative supply responses.The report added that Asian economies are likely to bear the brunt of the disruption, as nearly 13 million barrels per day (mbpd) of oil shipments to countries including China, India, Japan and South Korea pass through the Strait of Hormuz.

Meanwhile, Systematix Institutional Equities said global crude markets have entered a phase of heightened volatility over the past two weeks, driven by the destruction of oil and gas assets in West Asia, which has added a strong geopolitical risk premium to prices.

“Tanker freight rates and insurance premiums for vessels passing through high-risk zones have also surged, significantly raising procurement costs,” the brokerage said.

How Indian stock markets may react

The Nifty 50 fell 5.3% last week as the Iran–Israel conflict, a weakening rupee, persistent FII outflows and concerns over fuel supply weighed on sentiment. While Systematix expects near-term volatility to impact valuations, it continues to prefer Reliance Industries, Petronet LNG, Deep Industries and Gulf Oil as long-term bets.

According to Vinod Nair, Head of Research at Geojit Investments, market direction in the coming weeks will largely depend on developments in the Iran conflict and the trajectory of crude prices, given their implications for inflation, corporate margins, the current account deficit and RBI policy flexibility.

“A firm dollar and higher US bond yields may keep FIIs selective and volatility elevated. Selective value opportunities may emerge in fundamentally resilient and domestically driven sectors, while energy-sensitive segments could remain under pressure if crude prices stay elevated,” he said.

He added that domestic institutional buying has provided some cushion, but a sustained market recovery would likely require clear signs of geopolitical de-escalation, stabilisation in crude prices and improved clarity on fuel supply dynamics.

Siddhartha Khemka, Head of Research – Wealth Management at Motilal Oswal Financial Services, said market volatility is likely to persist as geopolitical tensions disrupt the energy market and keep risk sentiment fragile.

“Indian equities have seen a sharp correction in 2026 amid heightened global uncertainty, resulting in significant erosion of market value across segments,” Khemka said.

The Nifty 50 has declined over 11% so far this year, while the Nifty Midcap and Smallcap indices are down around 10% each. In March alone, the Nifty has fallen about 8%, marking its steepest monthly decline since the pandemic-driven crash of March 2020.

On the currency front, the Indian rupee recently hit a record low of Rs 92.45 against the US dollar as rising energy prices and risk-off sentiment heightened concerns about India’s current account deficit, given the country imports nearly 88% of its crude oil requirements.

Elevated oil prices have also intensified concerns around inflationary pressures, widening external balances and pressure on corporate margins, prompting investors to trim equity exposure and shift towards safer assets.

“Rate-sensitive and cyclical sectors such as banking, financial services and automobiles have seen notable selling pressure,” Khemka added.

Looking ahead, markets are expected to remain highly sensitive to developments in the West Asia conflict, movements in crude oil prices and trends in foreign fund flows.

“Persistent foreign outflows and elevated oil prices could keep sentiment cautious, while any signs of easing geopolitical tensions may provide relief to markets,” he said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)