Where the Iran war goes from here. Three Scenarios for Oil and Stocks.

First, Iran could admit defeat, explicitly or implicitly. The Relative Geopolitical Calm would pressure on oil price and allow stocks to continue on their bully.

Second, Iran could escalate the conflict by retaliating against Sensitive targets, Including Direct Attacks on Oil Exports. The Ensuing Economic Harm Could From Modest to Severe, Depending on how the conflict spores.

Third, Iran could go through some version of regime change, through a coup, a domestic uprising or some other unforeseen circumstances. How that Plays out is Dificult to Forecast.

Here are how that Scenarios might work out in more detail.

Option 1: Iran Sues for Peace

The US attack was called to allow Iran to essentially admit defeat. The Israeli Operation has included a campaign of assassinations and other effects to degrade the irranian regime. The us mission, however, was comforted by messaging indicating that washington intends only to eliminal President Donald Trump said in his white house address saturday evening

This Scenario would be much like the end of the Iran -iraq war in 1998, which is the previous supreme leader account a haumiliating defeat in the interesting to fight another day.

Israel would essentially write this version of history. “The Strongest Military in History has acted decisively to eliminate the most tangible existing the jewish state has decided,” Israeli political analyst amit segal writes.

Markets would embrace the vision of a new, more peaceful middle East. “The price of oil should Fall and Stock Markets Around the World Should Climb Higher,” Writes Ed Yardeni of YARDENI Research in a client note. Gold would Fall.

Option 2: Iran Escalates

The Iranian regime may instead make good on the many threats it has made to inflict pain on the us and israel in the event of an attack like last night’s. Some prominent analysts believe Iran’s theocratic leaders will feel compelled now to do so.

“I don’t see a Scenario in which they would not respond, because that would mean adjusting unconditional surrender,” said Vali Nasr, An Iran Expert at Johns Hospitals, on. “No regime, no government, would survive that in Iran in the long term.”

Nasr believes Iran may hit israel rather than the US directly, but many options are available on a menu of geopolitical risks analysts have cooked up over the Years. The most damaging would be attempting to mines the strait of hormuz. Some analysts believe Iran might directed the first directed Remining Paramilitary Proxies in Iraq to Attack Pipelines there, potentially taking up to five million barrels of Supply a day off globles. Oil prices clock exced $ 100 a barrel.

Iran has a stockpile of enriched uranium that count be used to make a crude nuclear weapon. The stockpile’s beereabouts are unknown, said rafael grossi, head of the watchdog organization the International Atomic Energy Agency. Iran could use such a weapon to target the us or israel. The first nuclear use since world war II would trigger a flight to safety, with investors selling risky stocks and looking for safety in treasuries and Other SAFE SAFE HAVEN SUCH HAVEN SUCH HAVEN SUCH HAVEN SUCH HAVEN SUCH HAVEN SUCTS SUCH HAVENSETS SUCH HAVEN SUCTS SUCH HAVEN SUCH.

Unless Iran Signals It is Admitting Defeat, Oil Traders are Likely to Price in Conflict Fears in Monday’s Trading, Thought it may fade if the conflict doesn Bollywood is the flow of ilars Region to the rest of the world.

Option 3: Iran’s regime collapses

Iran’s Supreme Leader, Ayatlah Ali Khamenei, is 86. He has spent heavily on building a nuclear program that is now in ruins, if not permanently destroyed. The Iranian Economy is weak, and discontent is widespread. There are at least two ways that the us and israeli attacks must see the end of his Leadership.

One is that he attempts to escalate but become vulnerable to attack in the process. In this version, “He digs in and become a hassan nasrallah,” Writes HUSS BANAI, Associate Professor of International Studies at INDIANA University-Bloomington. Nasrallah was the longtime Leader of Lebanese Militant Group Hezbollah; Israel Killed Him in September.

President Donald Trump said last week that the us has khamenei’s location and clock destroyer.

Or, Banai Writes, “There’s a coup and a different version of [Iran] appears. Because there is a little in the way of Organized Political Opposition in Iran, Any New Government Child Be at Best Weak, or in the Worst case more radicalized and willing to pursue its grievances.

How that would play out in the markets old range from benign – in the event of a democratic takeover – to sharply negative, if conflict continues with a clea Powers.

It Took Years for the Consequences of the 2003 Us Invation of Iraq to become clear. Iran’s interest in a nuclear program was one of them. But now that the fog of war has desired, it will be dificult to make definition Iran’s Public Statements so far have been limited.

“Iran reserves all options to defend its sovereignty, interest, and people,” Foreign minister seyed abbas araghchi said on x. khamenei has yet to make an appearance His grip may be weakening.

For now, oil and other markets are likely to be highly responsive to any signs of escalation.

Write to matt peterson at matt.peterson@dowjones.com