Bank of America Securities’ global economist Antonio Gabriel cautioned that investors are underestimating the Iran war’s potential to destabilize global financial markets, according to a Bloomberg report. Gabriel argues that current assessments fail to account for cascading risks, including supply chain disruptions, oil price volatility, and heightened geopolitical tensions. While the conflict’s immediate impact on regional stability is evident, he warns that prolonged instability could spill over into broader economic systems, affecting trade, energy markets, and investor confidence.

The economist emphasized that market participants are focusing narrowly on short-term outcomes, overlooking longer-term consequences such as reduced foreign investment in emerging economies or strained diplomatic relations. He noted that oil-dependent nations, particularly in Asia and Europe, face acute vulnerability if disruptions persist. Gabriel urged stakeholders to reassess risk models to incorporate scenarios where prolonged conflict accelerates inflation, triggers commodity price shocks, or derails global growth forecasts.

Businesses with exposures to Iran’s oil sector or regional trade corridors are urged to prepare for heightened uncertainty, as geopolitical volatility often translates into delayed deals and capital flight. The warning aligns with growing concerns about regional de-escalation efforts faltering, prolonging instability. Analysts stress that central banks and corporations must adopt proactive hedging strategies to mitigate fallout from a conflict that could reshape global energy and financial dynamics.

Key takeaway: The Iran war’s economic ramifications remain poorly priced, with potential shocks extending far beyond immediate headlines. Investors and policymakers face a stark reminder that geopolitical miscalculations can unravel even resilient markets, demanding urgent scenario planning.