12 Mar 2026
In the immediate aftermath of the latest escalation, Brent moved sharply higher before settling back into a lower range. Equity markets fell briefly and then partially recovered. That pattern is not unusual. Markets reprice uncertainty quickly, then wait for hard information.
The key variable is not the headline. It is whether oil supply is materially disrupted, and whether any disruption is temporary or structural. Current analysis points to OPEC+ holding roughly 2.8 million barrels per day of spare production capacity so it can cushion an outage, assuming shipping routes remain workable. Here’s Portia, an avatar from one of our investment partners, to explain further.
What history shows
There is a consistent sequence in major geopolitical shocks involving energy markets: an initial sharp reaction, a period of uncertainty, then stabilisation once the real economic impact becomes clearer.
One analysis of geopolitical shocks since the Second World War found the S&P 500 typically fell on day one, experienced a modest peak downturn, and recovered within weeks rather than years. Twelve-month returns were positive in most cases.
The 1990 to 1991 Gulf War is a useful example. Oil rose sharply, equities fell materially, and then markets recovered within months. By the end of 1991 the S&P 500 had delivered a strong positive return. Investors who held through the discomfort were rewarded. Investors who sold into the decline locked in the damage.
The trap is that uncertainty feels like a call to action. Selling feels prudent when the news is frightening. The problem is that markets tend to recover before the story feels safe and investors miss the bounce. The cost of missing the recovery can be large because rebounds are often concentrated into a small number of trading days. If you are out of the market waiting to “feel better”, you are usually waiting for prices to already be higher.
Our well built portfolio’s are designed for exactly these environments. Diversification across regions and asset classes is not a slogan. It is the practical acceptance that shocks happen, cannot be timed, and should not be allowed to dictate the long term plan. We focus on risk, the risk of not meeting long term goals, rather than treating volatility as a signal to abandon the plan.
Staying invested through uncertainty is not passive. It is an active decision to let time and compounding do their work, even when the news is trying itd best to convince you otherwise.
We hope you find our insights reassuring and take some comfort that our portfolios are built to withstand uncertainty and we manage them with discipline, including rebalancing when markets move.
