Courtiers Chief Investment Officer Gary Reynolds updates us on what impact the Iranian conflict is having on investments and the markets – and how Courtiers continues to protect clients’ wealth.

Since my earlier Monday morning update it’s continued to be a wobbly week for equities and, of course, for the price of oil. Around 20% of the global oil supply flows through the Strait of Hormuz, a narrow passage of water in the Persian Gulf that separates Iran from many of its oil producing neighbours. Around 20% of the world’s LNG (liquid natural gas) flows through the same channel. The Strait is the single most significant pinch point for the flow of global energy.

Iran’s threats to sink tankers off its borders has deterred shipping from navigating the waters of the Persian Gulf. Insurers, concerned at potential large losses, are refusing to grant maritime insurance for ships sailing through the Gulf of Hormuz, but the Americans have countered by offering protection.

Given all of the above it is perhaps something of a miracle that the price of oil has only risen by around 28%. It spiked a lot higher during the 1970s and again at the outbreak of the conflict in Ukraine.

Sentiment swings wildly during conflicts, especially today when media coverage is instantaneous. The important thing to remember is that these things do, eventually, pass even though, sadly, the human cost is often substantial.

Equity markets, concerned about the increase cost of energy on profits, have sold off with the FTSE100 down around 6% this week. US companies did better, retreating by just over 2% due, mainly, to America being self-sufficient for oil.

Courtiers’ funds are very broadly diversified across a range of stocks and sectors and so are well placed to withstand the buffeting which has, in the short term, affected asset markets.

We will keep you posted with any further significant developments but in the interim I hope you all have a good weekend.

For any queries, please speak to your adviser or contact us.