The world woke up on Saturday, 1 March 2026, to something markets had long dreaded but never truly priced in. The United States and Israel launched coordinated strikes on Iran in what the Trump administration dubbed “Operation Epic Fury.” Iranian Supreme Leader Ayatollah Ali Khamenei was killed. Nine Iranian Navy vessels were sunk. And within hours, Iran fired back, hitting US military bases across the Gulf and sending drones toward Dubai International Airport.
This is not a skirmish. This is a war. And it is moving markets in ways that will directly affect Australians, whether you own shares, hold gold, or simply fill up your car.
Figure 1: The Iran War Trade: How US Strikes on Tehran Are Sending Oil, Gold and Defence Stocks to New Highs
The Strait of Hormuz: The World’s Most Dangerous Chokepoint
Let’s start with the number that matters most: roughly 14 million barrels of crude oil transit the Strait of Hormuz every single day. That accounts for around 31% of all global seaborne crude exports.
Iran sits on the northern coastline of this narrow waterway. It has threatened to close it.
Even a partial disruption does not need to happen for markets to reprice. Shipping insurers are already demanding higher tanker premiums. Some vessels have stopped transiting the strait altogether. The market does not wait for confirmation; it prices in risk.
This is what separates the Iran strikes from previous Middle East flashpoints. As Kenneth Goh of UOB Kay Hian put it, Venezuela was a production story. Iran is a chokepoint story.
Oil: Brace for a Significant Spike
Brent crude settled at $72.48 a barrel on the Friday before the strikes. By Sunday night, perpetual swap futures had already jumped nearly 5% to around $71.70 per barrel on crypto exchanges that trade around the clock.
Former White House energy advisor Bob McNally predicts crude could rise $5 to $7 per barrel at Monday’s open as a baseline. But if Iran successfully disrupts Strait traffic, even temporarily, analysts warn prices could push well past $80, with some flagging $100 per barrel as plausible in a prolonged conflict.
For Australia, this matters enormously. We import around 90% of our liquid fuel needs. A sustained oil price spike feeds directly into petrol prices, transport costs, and ultimately inflation. The Reserve Bank of Australia, which has only recently eased rates, would face a new and unwelcome headache.
Gold: The Safe Haven Rally 2026 Keeps Running
Gold was already on a tear before this weekend. The gold price safe haven rally 2026 has been building steadily — driven by US debt concerns, dollar volatility, and geopolitical accumulation by central banks, particularly in Asia.
As of 2 March 2026, gold is trading at $5,356.39 per troy ounce, up $125.36, or 2.40%, in a single session. Over the past year, gold has surged more than 80%. Over six months, it has climbed over 46%.
Figure 2: The gold price’s performance over the last 12 months [Goldprice.org]
This is not a bubble. This is the world re-rating risk.
Iran strikes oil and gold, and defence stocks are the three legs of a classic war-cycle trade, and gold leads that trade every time. When Bitcoin fell, and equities wobbled, gold moved higher. That divergence tells you something important: investors want a tangible hedge right now, not a speculative one.
The irony is that many Australian retail investors remain underweight in gold. At $5,356 an ounce, some feel they have missed the move. But if the Strait of Hormuz remains contested for weeks, not days, the gold safe haven rally has further room to run.
Defence Stocks: The Uncomfortable Winners
Nobody likes to profit from conflict. But capital does not have a conscience, and defence stocks are surging.
Lockheed Martin, Raytheon Technologies, Northrop Grumman, and General Dynamics have collectively gained over 50% since 2022. RTX Corp has more than doubled since 2023. Elbit Systems, Israel’s largest defence contractor, moves higher on every escalation.
The logic is straightforward. Governments across NATO, Asia, and the Middle East have been raising defence budgets since Russia invaded Ukraine. The Iran strikes accelerate that trend dramatically. Australia itself is committed to a major AUKUS-driven defence uplift, and ASX-listed companies with defence exposure, including those in the technology and shipbuilding supply chain, deserve fresh attention from local investors.
The divergence is clear: airline stocks are selling off as insurers reprice Gulf airspace risk. Defence stocks are climbing. Markets punish travel and reward deterrence.
Don’t Make Heroic Bets
It is better to resist the urge to pile in on Monday morning.
Geopolitical oil spikes are notoriously volatile. If a diplomatic signal emerges, a ceasefire hint, a back-channel signal, the war premium evaporates in hours. You can be directionally correct on the trade and still lose money by entering at the wrong moment.
The smarter play is sizing. If you want oil exposure, treat it as a hedge, 3% to 5% of your portfolio, not a concentrated bet. If you want gold, think of it as insurance already in force, not a trade to chase.
For defence stocks, the investment thesis is structural, not tactical. Governments are not going to cut defence budgets after this weekend. That tailwind lasts years, not weeks.
And above all: watch the Strait of Hormuz. If tanker traffic resumes without major incident, the market bounces back quickly. If Iran succeeds in materially disrupting that waterway, we enter genuinely uncharted territory across energy, inflation, and equities globally.
What Australian Investors Should Watch This Week
- Oil prices at Monday’s open — the first clear signal of how markets are pricing the strike’s duration
- ASX energy sector — Santos, Woodside, and Beach Energy all carry exposure to elevated oil prices
- Gold in AUD terms — already at record highs; a weaker Australian dollar amplifies gains further
- RBA commentary — any inflation-related signals in response to energy prices
- Iron ore and base metals — risk-off sentiment often hits commodity demand from China, Australia’s largest trade partner
The world changed this weekend. The question for Australian investors is not whether to pay attention; it is how quickly they update their thinking.
Sources
- CNBC: https://www.cnbc.com/2026/02/28/markets-brace-for-impact-following-us-military-strikes-against-iran.html
- CNBC: https://www.cnbc.com/2026/03/01/iran-khamenei-trump-us-investors-markets.html
- CNBC: https://www.cnbc.com/2026/02/28/iran-us-attack-oil-market-economy.html
- CNBC: https://www.cnbc.com/2026/03/02/asia-markets-live-trump-iran-oil-prices-nikkei-hang-seng-us-israel-strikes-oil.html
- CNBC: https://www.cnbc.com/2026/03/01/stock-market-today-live-update.html
- Seeking Alpha: https://seekingalpha.com/article/4876777-iran-escalation-shock-triggers-risk-off-move-to-usd-and-gold-oil-defense-and-aerospace-win
- FX Empire: https://www.fxempire.com/forecasts/article/how-us-iran-conflict-could-drive-oil-gold-currencies-and-global-equities-1582610
- Sunday Guardian Live: https://sundayguardianlive.com/business/israeliran-tension-what-will-be-the-impact-on-us-stock-market-crude-oil-currency-will-gold-surge-silver-hit-100-173003/
- The Motley Fool: https://www.fool.com/investing/2026/03/01/iran-war-stock-market-stock-futures-defense-stocks/
- CNN Business: https://www.cnn.com/2026/03/01/business/oil-prices-us-attack-iran-vis
- GoldPrice.org: https://goldprice.org
