Analysis: Iran-Israel Military Escalation — How Operation Epic Fury Is Reshaping Oil, Defense, and Safe-Haven Markets
The most significant military confrontation in the Middle East since the 2003 Iraq War is now underway. Operation Epic Fury — the joint U.S.-Israeli campaign of precision strikes against Iranian nuclear and military infrastructure — has triggered Iranian retaliatory attacks on U.S. bases across the region and missile strikes near Dubai, sending shockwaves through global financial markets. Defense stocks have surged to 52-week highs, gold has breached $5,200 per ounce, and oil markets are pricing in Strait of Hormuz disruption risk for the first time since the 2019 tanker crisis. For investors, the immediate question isn't whether the conflict will escalate — it already has. The question is how to position portfolios when the world's most critical oil chokepoint sits within missile range of an active war zone, when defense budgets across NATO are being revised upward in real-time, and when traditional safe havens are flashing signals not seen since the early days of the Ukraine conflict. This analysis examines the financial implications across four key dimensions: energy markets and oil supply risk, [defense sector](/article/sector-watch-ba-vs-lmt-vs-rtx-which-defense-giant-offers-the-best-risk-reward-as-global-rearmament-accelerates) beneficiaries, safe-haven asset flows, and portfolio positioning strategies during extended [geopolitical uncertainty](/article/deep-dive-how-geopolitical-risk-affects-financial-markets-safe-havens-defense-spending-and-oil-price-shocks).