20.06.25 - Focus on Middle East developments

The conflict between Israel and Iran is intensifying, with both sides continuing their military strikes and leaders trading increasingly aggressive rhetoric. According to sources familiar with the matter, senior US officials already prepared plans for a potential strike on Iran in the coming days. However, President Donald Trump indicated last night that he intends to give Iran some time, stating he will decide within two weeks whether to proceed with military action. Meanwhile, Russia has warned that any US involvement could trigger “a terrible spiral of escalation.”

Markets: trends from last days seem to reverse, with a pause in the oil price rally - global equity markets in plus after being down during the last days

My view: Oil prices have firmed significantly, driven by geopolitical risk and concerns over regional supply chain disruptions. However, so far this spike is expected to have only the short to mid-term nature as OPEC+ nations are stepping in by increasing the output. The US, as a self-sufficient oil producer, remains largely insulated from direct supply shocks.

Once again, it's Europe that faces the brunt of rising energy prices. Its heavy reliance on oil imports leaves the continent exposed to renewed inflationary pressures and the risk of another economic drag, just as some recovery signals had started to appear.

Overall, this conflict adds another layer of uncertainty to an already fragile environment. The development is highly unpredictable.

By now, I see my portfolio well positioned, maintaining also an allocation to energy stocks. There’s little value in trying to front-run headlines in such a situation. I will only react decisively if meaningful developments show clear potential for whether a tactical short-term trade or a broader allocation shift.
One constant remain: volatility isn’t going away anytime soon.

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