🫨 Oil, AI, and War: Markets enter a new risk cycle

The conflict between the United States, Israel and Iran is now poised to spill directly into the global economy.

Saudi Arabia’s energy behemoth, Saudi Aramco, said that the conflict could severely disrupt oil and gas supplies all over the Gulf, driving energy prices much higher.

The Aramco chief executive, Amin Nasser, called the turn of events “the most serious disruption to emerge from the region’s energy industry in its history.”

Analysts at Rapidan Energy agreed, describing the current disruption as the biggest supply shock in oil market history.

The concern is simple. If the conflict starts to put a choke hold on oil flows from the Gulf, there may be consequences felt throughout the world economy.

Rising fuel prices increase transportation and manufacturing costs, which ultimately drives up consumer prices around the world. That would make it more difficult for central banks to tame inflation at a moment when many economies are already limping along under elevated interest rates.

Energy has emerged as the major risk to watch, and for markets already jittery.

The Strait of Hormuz is now the biggest concern for markets

The major worry for traders is the Strait of Hormuz, the narrow waterway where about 20 percent of global oil supply transit each day.

President Donald Trump issued a warning to Iran regarding interfering with oil shipments in the strait.

“If Iran attacks an American base or personnel we will be telling on Iran to hit by the United States of America 20 times harder than they have ever been hit until now,” Trump said on Truth Social.

The warning came as the fighting escalated.

U.S. Defense Secretary Pete Hegseth said Washington was planning another wave of bombings inside Iran, describing it as the “most intense day of attacks yet” in the campaign, which the Pentagon is calling Operation Epic Fury.

U.S. forces are targeting Iran’s missiles, navy and nuclear infrastructure, Hegseth said.”

The escalation has also transformed energy infrastructure across the Gulf into a possible battlefield.

Ras Laffan, Qatar Energy’s industrial site, was taken offline last week by an Iranian drone strike. The facility generates helium as a byproduct of liquefied natural gas processing, a resource essential to industries ranging from electronics and medical equipment to advanced manufacturing.

At the same time, officials in Abu Dhabi said another Iranian drone attack ignited a fire at an oil refinery within the Ruwais Industrial Complex in the United Arab Emirates.

Even partial interruptions to facilities like these can quickly send ripples through the global supply chain.

Energy shock spillover into tech markets

The conflict is already spilling over into markets beyond energy.

Shares of semiconductor stocks were among the first casualties as investors began re-evaluating the risks to global supply chains.

In fact, at least three industries, the production of energy and shipping routes and industrial gases in which the Middle East is likely to play a vital role are ongoing components of the semiconductor manufacturing ecosystem.

The sell-off has been especially acute for memory chipmakers Samsung Electronics and SK Hynix, which have lost at least $200 billion in market value combined since the conflict started.

The VanEck Semiconductor ETF (SMH) has dropped just over 3% since the war began, though it partially rebounded earlier this week.

And even with the volatility, the longer-term trend for this sequential improvement in semiconductor stocks stays. The sector is still up about 150% from the lows seen in July 2025, and prices are only approximately 6.5% away from all-time highs.

Investors are now following corporate earnings closely for clues that the boom in artificial intelligence infrastructure can continue even amid the geopolitical tumult. Oracle’s earnings report this week may provide one of the first clues.

But for now, markets are grappling with an unusual intersection of risks.

Military escalation, threats to energy supply and disruptions to industrial infrastructure are striking simultaneously, and traders are rushing to grasp just how far the shock could extend.

Meta acquires the AI agent network Moltbook, MOLT token surges 250%.

• Trump announces opening of America’s first new oil refinery in 50 years

• Bitwise CIO says Bitcoin could hit $1M in $38T store-of-value market

• Saudi oil giant warns Middle East war could ignite global inflation shock as energy markets seize up

• Jito Sol acquires and revives data platform Solana Floor

• Everyone will be a ‘bit unhappy’ with US aggressive push for crypto regulation

Join the Conversation!

We'd love to hear your thoughts and comments. Join our community and stay updated with the latest trends and discussions in crypto.

Twitter | Instagram | Telegram Channel | Linkedin | Facebook