Reference News Network, March 17 report: According to the U.S. "Forbes" magazine website, March 14 report, "war panic peak" may hit financial markets in the next 1 to 3 weeks.

The S&P 500 index has declined only 3% year-to-date, and has only fallen 5% from its historical high, still far from the bear market area or correction range, indicating that investors have not yet panicked about the war between the United States and Israel against Iran. But this situation may change soon.

Certainly, since the conflict broke out two weeks ago, oil prices have surged more than 40%, with a year-to-date increase of nearly 70%. Although global 20% of oil supply has been blocked due to Iran's de facto closure of the Hormuz Strait, oil prices are still below the peak levels seen after the 2022 Russia-Ukraine conflict.

In a report on March 12, Darn Almarai, Chief Geopolitical Strategist at Canada's Amo Macro, said: "The conflict is still far from ending, the Hormuz Strait is effectively closed, and the market is beginning to factor in a prolonged and uncertain game."

Reuters reported on March 14 that both U.S. and Iranian officials have rejected mediation efforts by other Middle Eastern countries to initiate ceasefire talks. Subsequently, President Trump told NBC News that he is currently unwilling to reach an agreement.

Trump said: "Iran wants to reach an agreement, but I don't, because the current conditions are not good enough."

Almarai pointed out that the Iranian regime still has the capability to threaten ships in the Persian Gulf and maintain high oil prices. Tehran has no intention of reaching a deal to end the conflict, instead trying to inflict as much economic pain as possible to prevent future attacks.

But Almarai believes the war will end within two months, as Iran also faces economic and internal political issues.

Almarai wrote: "Therefore, even if the Tehran regime ultimately has the motivation to end the war, because a prolonged conflict could cause division and threaten its survival."

Trump also faces constraints, such as high oil prices, mid-term elections later this year, and low public support for the war in the United States.

At the same time, both sides are preparing to further escalate the conflict. On the 13th, the U.S. attacked military facilities at the largest Iranian oil export base, Khark Island, and is sending 2,500 marines to the Middle East. Iran, on the other hand, is increasingly attacking more civilian infrastructure in neighboring Gulf countries.

Almarai pointed out that Iran's ally, the Houthi rebels in Yemen, are likely to attempt to close commercial shipping in the Red Sea, adding another layer of economic hardship on top of the blockade of the Hormuz Strait.

He warned: "If both straits are blocked simultaneously, it would create a compounded shock, affecting an additional 5 million barrels per day of oil traffic usually transported through the Bab el Mandeb Strait, and disrupting major trade routes between Europe and Asia, which could further drive up inflation, especially in Europe."

At the same time, the U.S. is unlikely to launch a full-scale ground invasion of Iran, but occupying Khark Island could cut off the Iranian regime's revenue stream and force Iran to reach an agreement without occupying Iranian territory — at least that is the current thinking.

However, even if Marines land on Khark Island, they will face the risk of missile and drone attacks from Iran.

There are even more alarming escalation options: attacking desalination plants that provide most of the freshwater for the Gulf region. David Sacks, head of the President's Council of Advisors on Artificial Intelligence and Cryptocurrency, pointed out this possibility and warned that such attacks could make the Gulf region almost uninhabitable.

Almarai admitted that the possibility of the war lasting longer than two months is increasing, and the Hormuz Strait is likely to remain closed during this period. This means that Brent crude oil prices will stay above $100 per barrel, and may even break through $150. However, the market has not yet reached the maximum level of panic.

Almarai predicted: "The peak of war panic is more likely to occur in the next 1 to 3 weeks. The longer the conflict lasts, the higher the investors' pricing of economic losses."

Almarai said that using oil prices as a measure of market panic, historically, oil prices reach their peak 4 to 8 weeks after similar conflicts erupt. The Iran war has now entered its third week.

Panic could manifest as a rise in global safe-haven sentiment, such as a stock market crash, triggered by factors like Houthi involvement, Gulf oil-producing countries declaring force majeure, or further U.S. escalation actions.

Almarai said that if the Hormuz Strait remains closed, the spillover effects will impact the agricultural and semiconductor markets due to shortages of key inputs such as fertilizers and helium.

After adjusting for inflation, oil prices actually reached $150 per barrel following the outbreak of the Russia-Ukraine war, but Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie, a UK energy research company, said the current situation could be worse.

He said: "In our view, it is not impossible for oil prices to reach $200 per barrel by 2026." (Translated by Lin Zhaohui)

Original: toutiao.com/article/7618118519917511183/

Statement: This article represents the personal views of the author.