Oil shock at markets' US-Iran crossroads

TL;DR

US-Iran War: Mark Lister analyses market crossroads after seven weeks of conflict, ceasefire, diplomacy, and US Strait blockade.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)[[2]](https://www.nzherald.co.nz/business/usiran-war-and-oil-shock-what-it-means-for-markets-and-investors/premium/LTX6MXADURDEZLVWA7SQ2LV4Y4)
Oil Above $100: Oil traded much of last week over US$100/barrel, trapping 10-15% of global supply in history's biggest disruption.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)
Two Paths Ahead: De-escalation rewards shares or persistent inflation triggers rate hikes and downturn.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)

The story at a glance

Mark Lister, investment director at Craigs Investment Partners, examines how the US-Iran war's oil shock is testing global markets amid fragile diplomacy. The conflict, now in its seventh week since late February 2026, features a recent ceasefire, top-level US-Iran talks in Islamabad since 1979, and a US naval blockade of the Strait of Hormuz after negotiations stalled.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)[[2]](https://www.nzherald.co.nz/business/usiran-war-and-oil-shock-what-it-means-for-markets-and-investors/premium/LTX6MXADURDEZLVWA7SQ2LV4Y4) This is reported now as oil stays high and volatility looms. The war began with US-Israeli strikes on February 28, disrupting a key chokepoint for one-fifth of world oil.[[3]](https://apnews.com/article/us-iran-war-israel-hormuz-18-april-2026-ab475cb979825b956a10d60103026b37)

Key points

War traps 10-15% of global oil production, marking the largest supply disruption ever; oil lingered above US$100/barrel last week.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)
US March inflation hit a two-year high; consumer sentiment at 74-year low per University of Michigan survey.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)
New Zealand's Reserve Bank warns June quarter inflation could reach 4.2%; markets price in three Official Cash Rate (OCR) hikes from July to 3.0% by Christmas.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)
Markets resilient so far: S&P 500 down 9.1% from peak but now 1.3% below February high; world shares up year-to-date; VIX at pre-war levels.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)
Incentives for de-escalation: US seeks political/economic win, Iran regime survival, China (buying 90% of Iran's oil) pushes peace.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)
Two stark paths: easing tensions spark share rebound, or sustained shock forces central bank tightening into slowdown.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)
S&P 500 earnings seen growing 13% year-on-year, led by tech; bonds attractive if growth falters, especially with possible Fed shift under new chair.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)

Details and context

The US-Iran war started February 28, 2026, with airstrikes by US and Israel hitting Iranian targets including leadership; Iran retaliated by closing the Strait of Hormuz, spiking oil prices and halting much shipping.[[3]](https://apnews.com/article/us-iran-war-israel-hormuz-18-april-2026-ab475cb979825b956a10d60103026b37)[[4]](https://en.wikipedia.org/wiki/2026_Strait_of_Hormuz_crisis) Recent developments include a 10-day ceasefire, failed Islamabad talks (highest since 1979 revolution), and US blockade from April 13 turning back 23 ships.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)[[3]](https://apnews.com/article/us-iran-war-israel-hormuz-18-april-2026-ab475cb979825b956a10d60103026b37)

Lister notes markets' calm reflects bets on compromise, unlike sharper drops in past shocks; bonds suffered in 2022 from inflation hikes but could gain if growth weakens.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads) Tech stocks, down 10% from October highs, show earnings strength and low energy exposure.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads)

Key quotes

"The situation remains serious and extremely fragile, and oil has still spent much of the past week above US$100 a barrel."[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads) – Mark Lister
"If tensions ease and oil prices fall, the sharp rebound from early April will be back on and patient share investors will be rewarded. If the disruption persists and inflation forces some central banks to tighten into a weaker economy, we’re looking at something much uglier."[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads) – Mark Lister

Why it matters

The war disrupts 20% of global oil via Hormuz, fueling inflation worldwide and threatening growth as in past shocks like 1970s crises.[[5]](https://www.theguardian.com/world/2026/apr/18/iran-closes-strait-of-hormuz-again-until-us-lifts-blockade) Investors face volatility with shares possibly rebounding on de-escalation or falling on rate hikes; New Zealanders see higher fuel costs and OCR pressure; businesses eye energy-sensitive sectors.[[1]](https://craigsip.com/news/conflict-leaves-markets-at-a-crossroads) Watch US-Iran talks, oil below $100, central bank moves like Fed chair change or RBNZ hikes, though outcomes hinge on fragile diplomacy.