How the Iran Conflict and the Strait of Hormuz Could Impact Markets and Your Portfolio

Confidence doesn’t always arrive with a bold entrance. Sometimes, it builds quietly, step by step, as we show up for ourselves day after day. It grows when we choose to try, even when we’re unsure of the outcome. Every time you take action despite Geopolitical headlines have once again moved to the forefront as the conflict involving Iran raises questions about energy supplies, global growth, and market volatility. For long‑term investors, it is natural to ask what this means for portfolios and whether any changes are warranted.

At Riggs Asset Management, we are closely tracking developments in the region and their impact on markets, with a focus on protecting and growing client capital through what we expect to be a “bumpy” year.

A Note of Gratitude to Our Service Members

Before discussing markets, it is important to recognize the human dimension of any conflict. The men and women serving as soldiers, sailors, airmen, Marines, and guardians around the world carry a tremendous burden on our behalf. Our thoughts and prayers are with them, and we look forward to the day when they can return home safely to their families and loved ones.

How Client Portfolios Are Positioned

Despite recent headlines, client portfolios have been holding up well. Performance was strong heading into the conflict, and through the first week of heightened tensions, portfolios have continued to demonstrate resilience.

Our investment team is actively monitoring markets, looking for opportunities to deploy capital more effectively while mitigating areas of increased risk. Where we see attractive valuations or market dislocations, we are prepared to take advantage of them. Where we see risks rising, we are willing to make adjustments to reduce exposure. In short, we are remaining vigilant and proactive rather than reactive.

We also see potential opportunity in this environment. Periods of short‑term volatility often create entry points that can support better returns over the remaining two‑thirds of the year.

Why the Strait of Hormuz Matters for the Global Economy

To understand the economic impact of the Iran conflict, it is helpful to focus less on Iran as an individual economy and more on the broader Middle East and, in particular, the Strait of Hormuz.

Approximately 20% of the world’s daily energy supply flows through this narrow waterway, including crude oil, natural gas, and refined products. The world consumes roughly 100 million barrels of oil per day, and about 20 million barrels pass through the Strait of Hormuz. Any disruption, or even the perceived risk of disruption, can influence energy prices and investor sentiment.

The region most directly exposed is Asia. Many Asian economies—including Japan, China, Vietnam, and the Philippines—source an estimated 80–85% of their energy from the Middle East. As a result, they are often the first to feel the impact of actual or potential supply disruptions, something we are already seeing reflected in regional equity markets. While the full economic effects would depend on how long tensions persist, a prolonged conflict could weigh more meaningfully on growth.

Europe is also affected, though to a lesser degree. Depending on the measure used, as much as 40% of Europe’s energy consumption can be tied to Middle Eastern supply. This link makes European markets sensitive to developments in the region as well.

The U.S. Energy Advantage—and Its Limits

The United States is in a relatively strong position from an energy perspective. The country is effectively energy sufficient and is a net exporter of both natural gas and crude oil. This structural advantage helps cushion the U.S. from direct supply risks that may arise from disruptions in the Strait of Hormuz.

However, higher global energy prices still matter. American consumers feel it at the gas pump, and businesses—particularly those operating quarries, industrial plants, and other energy‑intensive facilities—see it in their operating costs. If elevated prices persist for an extended period, they can weigh on profit margins, corporate earnings, and broader economic growth.

For now, much of the impact in the U.S. is being felt through price movements and headlines rather than through a shortage of supply. Our investment process accounts for both the direct effects of energy prices and the indirect effects they can have on inflation, growth, and company fundamentals.

Recent Moves in Oil Prices

Energy markets have already responded to the conflict. As of today, West Texas Intermediate (WTI), the benchmark for U.S. crude oil, has risen from around 57 dollars per barrel to just over 100 dollars per barrel. Brent crude, the global benchmark based on North Sea production, has increased from roughly 60 dollars per barrel to about 100 dollars per barrel.

If this trend were to continue and prices remained elevated, it could contribute to slower global growth and renewed inflation pressures over time. Should that scenario unfold, we would adjust portfolio positioning to help offset these risks, including revisiting sector exposures and favoring companies with stronger pricing power and balance sheets.

At this stage, however, market behavior suggests that investors view the situation as a short‑term shock rather than a structural, long‑lasting disruption. Equity and credit markets in the U.S., Europe, and Asia are reflecting concern but not panic, which aligns with the view that this may be more of a “bump in the road” than a turning point in the economic cycle.

Seasonality and a “Bumpy” Market Outlook

It is also important to put recent volatility into historical context. Seasonally, February and the early part of March have often been softer periods for equity markets. As we move into mid‑March, it would not be surprising to see a market bottom form and for risk assets to potentially move higher from there, especially if geopolitical tensions stabilize or investors gain greater clarity.

Coming into 2026, we anticipated that markets would be uneven—more of a “two steps forward, one step back” environment than a smooth upward path. We constructed portfolios with that backdrop in mind, emphasizing balance, quality, and flexibility. So far, market behavior has been broadly consistent with that view.

The key takeaway: short‑term volatility is not unexpected, and the current environment remains consistent with our base case rather than a reason to abandon long‑term plans.

What This Means for Your Portfolio

From our perspective, client portfolios are currently in a strong and appropriate position for the environment we see ahead. We are prepared for continued volatility, but we also see opportunities to add value as markets digest new information.

As always, the most important factors for long‑term success are diversification, alignment with your goals and time horizon, and a disciplined process that avoids emotional decision‑making during periods of stress.

If you have questions about how these developments relate to your specific situation—whether personal financial planning or business‑related concerns—please reach out to your Riggs Asset Management team member. We are here to help you navigate uncertainty and keep your plan on track.self-doubt, you reinforce the belief that you’re capable. Confidence isn’t about having all the answers — it’s about trusting that you can figure it out along the way.

The key to making things happen isn’t waiting for the perfect moment; it’s starting with what you have, where you are. Big goals can feel overwhelming when viewed all at once, but momentum builds through small, consistent action. Whether you’re working toward a personal milestone or a professional dream, progress comes from showing up — not perfectly, but persistently. Action creates clarity, and over time, those steps forward add up to something real.

You don’t need to be fearless to reach your goals, you just need to be willing. Willing to try, willing to learn, and willing to believe that you’re capable of more than you know. The road may not always be smooth, but growth rarely is. What matters most is that you keep going, keep learning, and keep believing in the version of yourself you’re becoming.