We are writing to provide an initial assessment of the recent joint United States–Israeli military action against Iran and the potential implications for global financial markets. We recognise the significant human impact of these events and the widespread concern they have generated internationally.

What has occurred?

On 28 February 2026, the United States and Israel conducted coordinated strikes targeting Iranian nuclear facilities, military assets, and senior leadership figures. The operation resulted in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei. President Trump has since indicated that further military action may occur in the near term and has publicly referenced regime change as an objective.

In response, Iran has launched ballistic missile and drone attacks against U.S. military bases throughout the Gulf region, as well as against civilian infrastructure. Dubai International Airport has sustained partial damage, and airspace across the Persian Gulf has experienced significant disruption. The situation remains highly fluid at the time of writing.

Market Update

Energy markets have been most affected by recent events. Oil prices have risen so far this year, mainly due to rising tensions between the U.S. and Iran and increased military activity in the Persian Gulf. Markets are concerned that these issues could disrupt oil supply.

It is likely oil prices could rise further in the short term. Oil tankers are currently avoiding the Strait of Hormuz, an important shipping route.

More broadly, financial markets are being cautious. Investors have been moving towards traditionally safer assets such as bonds, gold, and major currencies like the U.S. dollar.

Share markets have been slightly weaker, particularly in Asian trading.

Key Scenarios Under Ongoing Monitoring

The potential macroeconomic and market impacts arising from the current situation will largely depend on developments across several key areas:

• Whether the Strait of Hormuz remains open and shipping activity resumes. This will be the most critical factor influencing the near‑term oil price. Any prolonged disruption would have broader implications for global growth and inflation.
• The leadership transition in Iran following the death of Ayatollah Khamenei, including how decision‑making authority is structured and whether the new leadership seeks de‑escalation or further escalation.
• The extent to which the United States and Israel continue military operations within Iran and whether efforts shift toward sustained pressure or regime change.

Greater clarity around these factors is expected to emerge over the coming days and weeks. At this stage, we propose no changes to current portfolio positioning and will continue to monitor developments closely.