Oliver's Insights: Gulf War 3 – the threat to economies and markets from the US/Iran war

The key points are:

  • The start of a war between the US and Israel and Iran poses the risk of a significant disruption to global economic growth given the likelihood of significant disruption to the supply of oil, particularly through the Strait of Hormuz.

  • This in turn could contribute to a correction in share prices.

  • A $US40 a barrel spike in oil prices could add 40 cents a litre to petrol prices with a threat to growth & inflation. As a “tax on spending” the RBA should look through it.

  • For investors: share market falls are normal, timing markets is hard and the key is to stick to a long-term strategy.

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