Recent tensions in the Middle East have been unnerving to observe as has the market volatility it has created. However, history reminds us that markets have typically proven resilient through geopolitical “events” such as the one we are seeing presently unfold in Iran.
One of the important variables the markets are weighing is the price of oil. Since tensions with Iran have escalated, the price of oil has surged to over $90 per barrel at market close on March 6, 2026. This reflects a temporary “geopolitical risk premium” on oil, as the Persian Gulf supplies roughly 20% of the world’s energy. If the conflict in Iran remains contained and a diplomatic “off-ramp” presents itself, we expect to see oil prices ease as markets refocus on supply and demand fundamentals. Also worth noting, Iran’s role in the global economy beyond oil production is somewhat limited. The companies represented within the S&P 500 generate less than 2% of their total revenue from the Middle East, reinforcing the idea that the current conflict is likely more of a short‑term reaction to geopolitical headlines than an accurate reflection of corporate impact.
At the same time, last Friday’s U.S. jobs report showed the economy lost about 92,000 jobs in February and the unemployment rate ticked up to 4.4%, slightly above expectations. This signals an anticipated cooling in the labor market, however not necessarily a major deterioration in economic conditions.
While geopolitical tensions and economic data can create short-term volatility, markets historically recover as uncertainty fades. This has been true since the 1990s when the S&P 500 generally notched higher 1, 3, 6, and 12 month returns following geopolitical shocks.
Periods like this can be unsettling, but they are not unusual to see from time to time. Ben and I are closely monitoring the markets and the impact the current Iranian conflict has throughout the domestic and global economies. Well-diversified portfolios are designed with these types of periods in mind, which is precisely what we have done.
We take comfort knowing our accounts are currently positioned with a defensive tilt – the addition of gold across most accounts and maintaining an overweight in the quality of the fixed income we own provides a reassuring ballast to the current volatility we are seeing.
Staying disciplined and focused on long-term financial goals has historically proven to be the most effective approach to investing, especially when markets experience temporary uncertainty. We remain committed to this strategy and committed to being here to answer and address any questions or concerns that may arise.
Thank you for your ongoing confidence, support and friendship.
Joel, Ben & the Andrews Wealth team
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The information contained herein does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors.
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