The War in Iran Is Coming for Your Wallet

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3:49Nicole Lapin:It's time for some money real.

3:58I want to talk about what's happening between the U.S., Israel, and Iran, because what's going on in the Middle East right now is going to hit your wallet hard. The U.S. and Israel launched coordinated strikes on Iran on Saturday, February 28th, and the operation killed Iran's Supreme Leader Ayatollah Ali Khamenei, who ruled Iran for the last three decades. His defense minister, the commander of the Revolutionary Guard, and dozens of other senior officials were also killed. Iran has since fired back with waves of missiles and drones targeting U.S. bases across the region and Israeli cities. This is the biggest military event the Middle East has seen in a generation, And it has implications for the global economy that we need to know right now.

4:39But first, let's unwind the chain reaction that got us here. The U.S. and Iran have been locked in a standoff over Iran's nuclear program for decades now. The real modern flashpoint came in 2018 when President Trump pulled the U.S. out of the 2015 Iran nuclear deal, which had capped Iran's uranium enrichment at a low-grade civilian grade, which is under 4%. After the deal collapsed, Iran began ramping up its enrichment, reaching 60 % purity last year. For context, weapons-grade uranium is about 90%, so the gap is closing. Then in June, Israel launched a major airstrike campaign against Iranian nuclear and military facilities.

5:21On June 22nd, the U.S. joined in, striking three of Iran's major nuclear sites. The Trump administration declared it an overwhelming success and a ceasefire was reached on June 24th, 2025. But here's the thing about ceasefire agreements in a conflict as deep and as complex as this one. They are very fragile. Iran was committed to rebuilding its nuclear program. The U.S. and Iran went back to the negotiating table multiple rounds of indirect talks with Oman as a mediator. Then, as recently as February 27th, just one day before these strikes, Oman's foreign minister announced that Iran had agreed to degrade its nuclear stockpiles.

6:01And suddenly, briefly, it looked like diplomacy might have had a pulse. But it did not. Not yet anyway. Less than 24 hours after the announcement from Oman, Israel launched strikes on Iranian targets, followed by U.S. forces. President Trump announced the operation at 2.30 in the morning. U.S. forces say that they've now hit over a thousand targets in the opening days of the operation alone. Iran's response has been sweeping and it's deliberately spreading beyond its own borders. Iran's strategy is to make this conflict as painful and as costly as possible for the United States and its allies by targeting the Gulf countries that host American military bases and allow U.S.

6:42operations to run from their borders. Disrupting the American financial system is also a weapon, and it's already being used. To prepare for economic fallout, foreign policy and financial analysts are watching a few things very closely right now. The biggest wild card is the Strait of Hormuz. That is this narrow strip of water between Iran and the Arabian Peninsula. It is the world's single most critical oil choke point. About 20 % of the world's oil shipped by sea passes through it. roughly 15 million barrels a day. For context, that is enough gas to fill roughly 12 to 15 million cars. So the big question here is, will this be another long conflict?

7:24According to analysts at Allianz Global Investors, the death of Khomeini, while a massive shock, could actually reduce the risk of a prolonged regional war because it raises the possibility of regime change and potentially a new government that does not carry Iran's 47-year hostility toward the West. But that is an optimistic read. Chatham House experts warn that Iran, with its back against the wall, has every incentive to externalize the conflict, drawing in its allies, expanding the theater, and making the cost of these strikes impossible for the U.S. and Israel to absorb quietly. Oxford Economics Research Arm put it bluntly.

8:03The conflict is unlikely to last beyond two months, but the near-term volatility will be severe. In the markets, they are already feeling the volatility. And the fact that markets are closed on the weekends may have been, in part, why the strikes happened the way they did. Venezuelan President Maduro was also captured when the markets were closed on Saturday, January 3rd. Here's how this conflict will reach your wallet. The most immediate consequence will be oil prices. U.S. crude oil surged more than 7 % on Monday. Brent crude, the international oil benchmark, jumped nearly 9 % to hit nearly$80 a barrel.

8:39That's the highest price it's been in over a year. And oil had already climbed 17 % this year before the strikes even started. Traders saw the U.S. military buildup and thought something like this would be coming. Let me break down the basic economics behind the trade. Oil is a global commodity, and its price is driven by supply and demand. When a conflict breaks out in the Middle East, traders immediately start pricing in risk that supply could be disrupted. It doesn't matter if a single barrel has actually been taken off the market yet. The fear of disruption is enough to send prices higher because markets trade on expectations.

9:14Iran produces nearly 1.6 million barrels of oil per day. Add that to the threat of the Strait of Hormuz being blocked, and suddenly the market is staring at a potential supply shock with no easy replacement. Less supply, same demand, higher price. That's the equation that's playing out right now. The spike in crude has a direct and unpleasant downstream effect for gas prices. When refineries pay more for oil, you pay more at the pump, usually within days to weeks. And this is on top of an already fragile economic environment. Friday's wholesale inflation data came in at 2.9%, nearly double what economists were expecting.

9:51So we've got war-driven energy inflation stacking on top of pre-existing inflationary pressure, and that is not a great combination. While this is a big escalation in the Middle East, there has been a long history of conflict. And when you look at that history, you can see patterns in the way that these investments move up and down in response. Understanding these patterns and being able to react quickly is an important way to protect your portfolio. Here's what goes up. Defense stocks are the most obvious. And yes, they've moved dramatically recently. At the time I'm recording this, Lockheed Martin is up about 3 % compared to last week.

10:30Northrop Grubman is up about 6%. The iShares US Aerospace and Defense ETF has already surged 14 % this year before the weekend, and that number is still climbing. Energy stocks, too, surge alongside crude oil prices. ExxonMobil and Chevron both gained about 4 % on Monday. ConocoPhillips was up more than 5%. If you hold energy stocks or ETFs, this week has probably been a bright spot in an otherwise nerve-wracking portfolio check. Another beneficiary is gold, because it is a classic safe haven play, and it's performing like one right now. Spot gold hit over$5 ,400 per ounce on Monday, already up 22 % year-to-date before the strikes even happened.

11:12JP Morgan has raised its gold price target to$6 ,300 per ounce by December of 2026. That means, just to take a step back and decode it for a second, that one of the world's biggest banks is making a bet on sustained instability. Defense, energy, and gold are usually the three assets that see the biggest upswing when the U.S. is in conflict with the Middle East. And just to be human for a second, If it makes you feel weird to be thinking about buying stocks that rise during times of war, I absolutely get it. Just because traders on Wall Street buy these stocks does not mean you have to. It is your portfolio.

11:51You call the shots on how you want your values reflected in your portfolio. But even if you don't buy any of these sectors, it is really important to understand how assets move in response to world events so that you can protect yourself. You don't have to play offense, but you do need to understand how to play defense. OK, so now here's what goes down. Travel stocks. On Monday, airlines and travel stocks got hammered. Middle East airspace is effectively closed. Routes are being rerouted. And consumer anxiety about travel in wartime environments is absolutely real. Cruise lines, hotel chains and tourism exposed stocks all sold off.

12:28And I will tell you from 25 years covering business news, it is not uncommon to see the stock market as a whole fall when there's conflict abroad. The S &P 500 opened sharply lower on Monday morning, but it did not sink as low as you might expect. Interestingly, it recovered almost entirely by the time the market closed. The S &P 500 ended Monday basically flat. The Nasdaq actually ended up slightly higher. What happened here was that investors bought the dip, particularly in cash-rich tech names like NVIDIA and Microsoft, which historically hold their value much better than most in conflict-driven sell-offs.

13:05Here's the broader historical pattern worth really understanding. Markets almost always overreact to geopolitical events in the short term and then recover. Here's the thing. Markets always, always, always recover. We just don't know exactly when. So an uptick in oil stocks, an uptick in defense and gold, and a dip in travel stocks are all really predictable trends when the war escalates in the Middle East. But trying to time the dip and the recovery in the overall market is way more of a challenge. In other words, I just wouldn't do it. So how long will we see oil go up? What should we do with our portfolios?

13:40Well, none of us can predict the future, but here's my take. The market's resilience on Monday was actually quite a tell. Strikes were anticipated. The U.S. military buildup in the region had been building for weeks. Two carrier strike groups and unprecedented pre-positioning of air power, all of it telegraphed. Traders had time to adjust. That's why the market recovered instead of cratering. The scenario that should worry you isn't what we know. It's what we don't know. A surprise attack on Saudi Arabia's oil infrastructure, a full Strait of Hormuz closure, or Iran successfully bringing in a major player as a military backer.

14:16Those are the risks that could change the equation entirely. The smart move right now isn't panic, and it definitely isn't blind optimism, but it is understanding what a conflict actually means for each asset class in your portfolio and making intentional choices, not reactive ones. For today's tip, you can take straight to the bank. Consider adding an energy royalty company to your portfolio rather than a traditional oil stock. Now, of course, you should absolutely do your own research, but here's why this is something that I'm looking into right now. Royalty companies like Viper Energy or Blackstone Minerals collect shares of revenue every single time oil is pulled from a well they own royalty rights to.

14:54They have no drilling costs. They have no operational expenses or exposure, meaning when oil prices spike in a conflict like this, their margins explode upward while traditional oil companies still absorb their fixed costs. It is a way to get long oil prices without taking on the full operational risk of a producer.