Markets were expecting an Iran-US confrontation for weeks, but one of the worst-case scenarios might be unfolding. Trump has chosen a full-scale operation rather than a single-day warning. Although the first strike was very successful and eliminated most of the leadership, Iran was preparing for this case. According to Iran’s foreign minister, officers in charge of the rockets have instructions and are now working independently with a very loose chain of command. This tactic surely increases the planned operation time and cause panic in the Middle East.

A longer conflict, a closed Hormuz Strait, and Iran striking almost everywhere are one of the worst cases for the energy market. Although the traffic did not stop completely, the transporting volume and prices have been affected significantly. South Asian countries, Europe, the UK, and Japan could be the most negatively affected in the short term from energy shortages, but if it lasts longer, a global stagflationary effect could start.

Brent oil broke the downtrend channel from 2023 ahead of the operation start and then gapped up this week. Currently, the price is testing the 81-82 zone, which likely will not be enough to calm the markets. If this operation is going to last longer than four weeks, and the first signs strongly signal that it will, Brent is likely to go up more. After the war, however, a big short opportunity might present itself depending on how much oil infrastructure damage is present in the Middle East.

After the 81-82 resistance, 86 and 95 are the next two key resistances to follow.