The United States and Israel launched military strikes on Iran on Saturday, targeting key leadership figures, drawing the Middle East into a new conflict that US President Donald Trump said would eliminate a security threat and give Iranians an opportunity to overthrow their rulers.

The strikes have alarmed neighboring oil-producing Gulf states, as fears grow that the confrontation could widen, while Tehran responded by launching missiles toward Israel.

Below are potential scenarios for how the conflict could reverberate across global markets:

Potential surge in oil prices

Oil remains the clearest barometer of Middle East tensions. Iran is a major oil producer and sits opposite the energy-rich Arabian Peninsula across the Strait of Hormuz, through which roughly 20% of global oil supply flows. Any escalation could restrict crude flows and drive prices sharply higher.

Brent crude was trading near $73 per barrel on Friday, up about 20% since the start of the year.

Four trading sources said some major oil companies and global trading houses have suspended crude and fuel shipments through the Strait of Hormuz following the attacks.

William Jackson, chief emerging markets economist at Capital Economics, said that even if the conflict is contained, Brent could rise toward $80 per barrel, the level reached during the 12-day war in Iran last June.

He added in a note that a prolonged conflict disrupting supply could push prices toward $100 per barrel, potentially adding between 0.6 and 0.7 percentage points to global inflation.

Heightened volatility across markets

The conflict is likely to amplify volatility in global markets, which have already experienced sharp swings this year due to Trump’s tariffs and broad selloffs in technology stocks.

The US VIX volatility index has climbed about one-third this year, while the MOVE index, which tracks US Treasury volatility, has risen 15%.

Analysts believe currency markets will not be immune.

Commonwealth Bank of Australia noted that the US dollar index fell about 1% during the June war, though the move was short-lived and reversed within three to four days.

In a note published last week, analysts said the scale of any decline would depend on the size and expected duration of the conflict.

They added that if the war drags on and disrupts oil supply, the US dollar would likely strengthen against most currencies except the Japanese yen and Swiss franc, as the United States is a net energy exporter and benefits from higher oil and gas prices.

While previous moves were short-term and followed by rapid recoveries, JPMorgan indicated that the situation could differ this time if the conflict persists and risk premiums remain elevated, especially if escalation with Iran leads to more intense operations against its regional proxies.

Safe havens return to focus

The Swiss franc, traditionally seen as a safe haven during periods of instability, is expected to face additional upward pressure, creating potential challenges for the Swiss National Bank. The franc has already gained about 3% against the dollar this year.

Gold is also likely to attract renewed inflows. The metal has posted record performance, rising 22% since the start of 2026, while silver has delivered strong gains as well.

US Treasuries may also benefit from increased demand, as yields have fallen in recent weeks.

Bitcoin, however, has not behaved as a safe haven. It fell 2% on Saturday and has lost more than a quarter of its value over the past two months.

Outlook for gold and silver

Gold and silver are expected to open Monday with notable gains, driven by escalating tensions between Israel and Iran, prompting investors to hedge through safe-haven assets, according to market experts.

Developments intensified after Israel launched preemptive missile strikes against Iran, causing explosions in Tehran and raising fears of a broader conflict. Analysts say such uncertainty typically channels flows into gold and silver.

Gold briefly approached $5,300 per ounce, while silver moved near $93 per ounce. Market participants are watching whether gold could reach $6,000 and silver $200, though analysts caution that such levels would require sustained demand and prolonged global instability.

Spot silver rose 7.85% to $93.82 per ounce, while gold traded at $5,296 per ounce as of 09:33 GMT on February 28. US gold futures for April delivery closed Friday at $5,247.90, up 7.6% since the start of February.

Middle East markets in focus

Equity trading in Middle Eastern markets on Sunday, including Saudi Arabia and Qatar, is expected to provide an early gauge of investor sentiment. While these markets are closely tied to oil prices, an expanding conflict could have broader economic implications.

Ryan Lemand, chief executive and co-founder of Neovision Wealth Management, said markets would likely decline if hostilities persist, adding that Gulf equities could fall between 3% and 5% depending on the scale of the conflict.

Airlines and defense stocks

Global airlines canceled flights across the Middle East on Saturday, and their shares could come under pressure if the conflict expands and more airspace closures are imposed.

Conversely, European defense manufacturers could see additional demand, with the European defense sector index already up about 10% since the start of the year.

Global grain markets showed mixed performance, with soybean and wheat prices rising while corn remained stable, amid a combination of profit-taking activity and shifting expectations for global agricultural demand.

Soybeans rebound after profit-taking

Soybean futures traded on the Chicago Board of Trade rebounded after profit-taking in the previous session, remaining near their highest level in more than three months and on track for a second consecutive monthly gain.

The most actively traded soybean contract rose 0.15% to $11.65 1/4 per bushel, bringing total gains in February so far to around 9.5%. Support has come partly from expectations of stronger global demand and shifts in international agricultural trade patterns.

Wheat continues higher while corn holds steady

Wheat futures gained 0.39% to $5.76 3/4 per bushel, marking a monthly increase of roughly 7.2%. Corn futures were unchanged at $4.43 1/2 per bushel, though they have risen about 3.62% during February.

Impact of trade policy and biofuels

Sources indicated that the administration of US President Donald Trump is preparing a plan requiring major oil refineries to compensate for at least half of the biofuel volumes previously exempted under the small refinery waiver program. This could support demand for crops used in biofuel production, including corn and soybeans.

Global trade and agricultural production developments

Brazil is expected to increase soybean exports to China in 2026, benefiting from weaker Argentine supply despite growing competition from US farmers, according to analysts at Hedgepoint Global Markets.

Meanwhile, wheat prices on the Euronext exchange rose, supported by import demand and a weaker euro, which improves the competitiveness of European grain in global markets.

Weather and global grain demand

In Saudi Arabia, the General Food Security Authority issued a tender to purchase 655,000 metric tons of wheat. Forecasts also suggest India could experience one of its hottest March months on record, potentially affecting wheat and rapeseed production in key agricultural areas.

In Ukraine, grain shipments to Black Sea ports increased by 2% in February compared with January, though they remain below levels recorded last year.

US grain trade

The US Department of Agriculture confirmed private export sales totaling 178,000 tons of corn to Japan, with 154,000 tons scheduled for shipment during the 2026/2027 marketing year and 24,000 tons during the 2027/2028 season.

Outlook

Grain markets are expected to remain influenced by global demand trends, trade policies, and weather conditions, particularly as volatility persists in energy markets and international trade flows.

The White House has asked major technology companies to make formal pledges ensuring that the rapid expansion of data centers will not lead to higher electricity bills for American households, amid growing concern over the massive energy demand required by the expansion of artificial intelligence.

The US administration has reached out to major firms such as Microsoft and Alphabet — both of which have strongly supported its policies — to discuss signing voluntary, non-binding agreements in which companies commit to “covering their own costs” while building new AI infrastructure.

A key element of the proposal would require operators of large-scale data centers to bear 100% of the costs of building new power plants and upgrading electricity grids needed to run their facilities. Companies would also be asked to sign long-term electricity contracts to ensure that consumers are not left carrying the financial burden if demand declines or projects fail.

The initiative aims to address concerns that AI-driven growth, with its huge electricity requirements, could place additional strain on US power grids that are already facing operational constraints.

Federal projections suggest that electricity demand from data centers could triple between 2025 and 2028, adding significant pressure to aging regional grids. Electricity prices in some areas have already risen faster than overall inflation, while wholesale energy prices continue to climb, making household utility bills an increasingly sensitive political issue ahead of midterm elections in November.

During his election campaign, President Donald Trump pledged to halve electricity prices within 18 months of taking office, but residential electricity costs have continued to rise gradually. In a previous post on Truth Social, the president said data centers are essential for AI development but insisted technology companies must pay their own way.

A voluntary, non-binding agreement

The proposed deal would not be legally binding, and officials have noted that the draft proposal could still change. However, policymakers believe public commitments could create accountability and demonstrate to voters that the government is trying to prevent AI infrastructure from increasing living costs.

Under the initial framework, tech companies would work with federal and local regulators to structure energy agreements designed to protect residential consumers as much as possible. Beyond electricity prices, data center developers would also be expected to ensure new sites are “water positive,” minimize noise and traffic congestion, and support local education and community initiatives.

The proposal comes as some US cities and states — including Atlanta and New Orleans — have begun placing restrictions on new data center developments, while more than 20 projects were delayed or canceled in January due to community opposition.

Microsoft has already announced it will cover additional infrastructure costs related to its data center plans, while AI company Anthropic recently said taxpayers should not bear the financial burden of AI expansion.

Some industry operators, however, have pushed back, arguing that they already pay the full cost of their electricity usage and that properly designed tariff structures can protect consumers.

In the United Kingdom, energy regulator Ofgem has launched a review of electricity grid connection queues after receiving requests exceeding 50 gigawatts related to data center projects — more than Britain’s current peak daily demand.

The regulator warned that rising demand for grid connections could delay other critical energy projects. Planning applications for data centers in the UK reached a record high in 2025, with more than 60 new applications submitted in England and Wales, up 63% from 2024.

Copper prices rose during Friday’s trading, heading toward a seventh consecutive month of gains, supported by optimism surrounding global demand growth.

The most-active copper futures contract on the London Metal Exchange climbed 1.3% to $13,478 per ton at 01:47 p.m. Makkah time, after touching its highest level since February 4 at $13,496 per ton.

Data released after the Lunar New Year holiday in China showed copper inventories in Shanghai Futures Exchange warehouses rising to their highest level in nearly 10 years, reaching 391.5 thousand tons, up 44% from levels seen two weeks earlier.

UBS raised its copper price forecasts by $500 per metric ton across all time horizons, projecting prices could reach $15,000 per metric ton by the end of March 2027. The bank maintained its positive outlook, recommending that investors keep long-term long positions in the industrial metal.

The investment bank expects copper prices to rise on a yearly basis despite caution in the near term. The recent price rally has paused temporarily, with elevated levels expected to persist through 2026, while seasonal economic slowdown around the Chinese Lunar New Year contributed to a period of price consolidation.

Supply and demand forecast revision

UBS updated its supply and demand forecasts based on the latest available data. The bank now expects a slightly smaller supply deficit in 2025 of around 200,000 metric tons, compared with a previous estimate of 230,000 tons.

At the same time, it raised its forecast for the 2026 supply deficit to 520,000 metric tons, up from a prior estimate of 407,000 tons. The widening supply gap remains one of the key factors supporting a bullish medium-term outlook for copper prices.

The bank reaffirmed its recommendation for clients to maintain long positions in copper based on revised supply-demand fundamentals, noting that its updated outlook implies prices will stay elevated throughout 2026.

Decline in Chilean output

On the production side, data from Chile’s national statistics agency showed that copper output in the world’s largest producer declined 3% year-on-year in January to 413,712 metric tons.

Industrial production in the Andes nation also fell 3.8% during the same month compared with a year earlier, indicating continued pressure on the global supply side of the metal.

In US trading hours, May copper futures were up 1.2% by 16:00 GMT at $6.07 per pound.