Financial Times Markets provides a data-driven analysis of how Middle East conflicts historically affect global markets. The analysis examines five major oil supply shocks over the past 50 years, revealing that three triggered or amplified US recessions. The 2003 and 2022 oil shocks coincided with turning points, limiting economic damage.

A classic "buy on the cannons, sell on the trumpets" trading strategy typically succeeds, with shorter conflicts proving more favorable for equities than prolonged wars. Risk-off trades demonstrate considerable durability on average. Energy-intensive sectors and certain emerging markets face the greatest vulnerability when oil prices spike, following predictable patterns established in previous conflicts.

Federal Reserve responses have evolved significantly since the 1970s and 1980s. While the central bank previously tightened monetary policy during oil shocks, it now prioritizes addressing purchasing power concerns over maintaining credibility. Oil price increases show a direct correlation with inflation, though business sentiment remains surprisingly resilient to energy supply disruptions. With current oil price movements representing only the 38th largest gain since 1990, many historical comparisons may prove less relevant than anticipated.