What war signals for the world economy

In a world where financial markets used to melt at every puff of Middle Eastern smoke, it's remarkable how composed they've become, even as drones and missiles whizzed between Iran and Israel.

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Our investment team have been here many times and while this one is very, very different in terms of the potential or, some might say, inevitable world war, a steady hand at the tiller is required. It’s the calm thinking which ensures we look through noise and panic.

Not long ago such an escalation would have had oil prices soaring, traders scrambling and central banks freaking out. When Israel struck Iran, Brent crude futures prices did spike - 7% in the day, and Brent crude flirted around $78 (an intraday high of 13%) yet, by the time the dust settled, it had drifted back down to around $73, even lower than when the hostilities began: so what's changed?

Well, for one thing, traders now demand more than just loud noises. Gone are the days of knee-jerk panic. Today the market wants substance: real, sustained disruption to global oil supply, not sabre-rattling or symbolic fireworks, which is how they saw it: and, while the noise was indeed thunderous, the fundamentals held. OPEC+ still sits on around four million barrels per day of spare capacity. The US remains the world's top producer, with Brazil and Guyana queuing up to fill any gaps. The cupboard is well stocked.

Most telling, though, is Iran's own restraint.