The war in Iran rippled across the investment landscape this week. Oil prices surged in the aftermath of the initial air strikes over the weekend, as investors braced for potential disruptions to energy production in the Middle East. Shipments through the Strait of Hormuz, a key chokepoint for oil and gas, were also seen at risk, which helped drive a sharp increase in European gas prices. Brent crude eclipsed $80 a barrel on Tuesday and closed at its highest level since January 2025. Trading in oil futures calmed a day later after President Donald Trump said the U.S. Navy could escort vessels traversing the Strait of Hormuz. Stock and bond prices also turned volatile amid heightened uncertainty over geopolitical strife and potential market risks that could emerge during a prolonged conflict. Treasury yields trekked higher on Monday in a sign that investors grew worried over higher energy costs feeding inflation.

The war unfolding across the Middle East is more expansive than recent conflicts in the region, making it more challenging to evaluate the potential fallout. There are still multiple scenarios and a range of market implications that could emerge. For instance, a war that lasts more than a few weeks could further squeeze oil markets as regional inventories become depleted. The conflict is also a reminder that investors are juggling two significant but divergent forces in the economy: a tech-driven productivity boom and a fractured geopolitical backdrop. In the U.S., the Labor Department’s jobs report on Friday is expected to reveal a gain of 50,000 jobs in February, based on estimates tracked by Dow Jones. The economy added 130,000 jobs during the previous month, according to the Labor Department.

A panel of PGIM experts gathered to discuss how the war could influence global markets, the economy, and geopolitical risks. Explore our live updates on the war in Iran to access a replay of the webinar and more views from PGIM.