What other variables are there in the Iran conflict?

On February 28, the joint military strike by the United States and Israel against Iran completely ignited the geopolitical powder keg in the Middle East. After the news of the death of Iran's Supreme Leader Ali Khamenei was confirmed on March 1, today gold and oil prices staged a classic "high and then low" performance, with the market's reaction being relatively restrained. On March 2, Soochow Securities Co., Ltd. stated in its latest research report that the current macro main line is clear: in the short term, the market will follow the trading logic of "first avoiding risks, then easing." However, the shipping status of the Strait of Hormuz, whether the United States will be drawn into ground warfare, and the internal power shifts in Iran remain the three major tail risks hanging over the market. Specifically, if the Strait of Hormuz is substantially blocked, it could lead to a short-term surge in global oil prices above $100; if the United States is forced into a prolonged ground war, it will face soaring oil prices, forced interest rate hikes, and a backlash against national strength; the internal power vacuum and shifts in Iran will directly influence whether the conflict escalates further. Soochow Securities believes that in the long term, the frequency and intensity of global geopolitical conflicts are increasing, and the allocation value of gold and oil as strategic hedging assets is becoming more prominent. Eye of the Geopolitical Storm: Benchmark Simulation of US-Iran Conflict and Three Major Variables The research report points out that Trump's "talk through force" strategy is showing initial results, but the risks of the Strait of Hormuz and prolonged warfare remain the sword of Damocles over the market. In the military action on February 28, Trump announced the launch of the "Epic Fury" operation aimed at destroying Iran's missile industry, controlling the Strait of Hormuz, and having a "zero tolerance" policy towards nuclear facilities; Iran, in turn, launched hundreds of missiles and drones in a restrained counterattack under "Real Commitment-4." Soochow Securities stated that the market currently has a high expectation probability of 64% for a ceasefire before April. In the benchmark scenario, after successfully implementing a "decapitation" strike, Trump has taken the initiative, and both sides are likely to replicate the twelve-day war model between Israel and Iran in June 2025, declaring victory through limited airstrikes to appease domestic politics. The report predicts that in the benchmark scenario, the US and Iran are expected to control the conflict within the limits of airstrikes, with the situation likely to cool down within 2-3 weeks. At that time, risk aversion is expected to dissipate, and oil prices may fall back to the $60-70 range, while gold prices are expected to adjust to around $5,200. The market currently has a high expectation probability of 64% for a ceasefire before April. However, the following three major variables must be heeded: Substantial blockade of the Strait of Hormuz: This strait carries 20%-30% of the world's oil shipping. If the conflict spirals out of control and leads to a substantial blockade, Brent crude oil prices are highly likely to violently break through $100-110 per barrel in the short term. This is the tail risk that needs the most vigilance currently. The dual backlash of the US getting caught in a prolonged war: If the US is forced to deploy ground troops, it will face deadly chain reactions: soaring oil prices will force the Federal Reserve to raise interest rates significantly, directly threatening Trump's midterm elections; At the same time, it is mired in a quagmire similar to the Russia-Ukraine conflict, continuously depleting national strength. Uncertainty of the power vacuum within Iran: Whether the interim leadership committee can suppress internal divisions within the Revolutionary Guard will determine whether Iran moves towards an extreme militarized "military government" model or collapses under internal and external pressures, which will directly influence the probability of conflict escalation. Risk Warning and Disclaimer The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk