Geoeconomics of US strikes on Iran: how markets react to escalation and what will happen to Ukraine
The strikes by the United States on Iranian territory became the largest direct operation against Iranian territory in decades, causing a noticeable reaction in the world markets. Investors recorded a change in sentiment: demand for defensive assets increased, volatility increased on stock exchanges, and commodity and currency markets reacted in accordance with the scenario of potential escalation. Unlike local incidents in the region, this time we are talking about a direct impact on the infrastructure of the state, which is a key supplier of oil, an active participant in regional politics and a player capable of influencing international logistics routes and transaction flows. Against this background, the question arises: what exactly are the consequences of this escalation for Ukraine in financial, trade and security dimensions?
Strike on Iran: How the market is reacting to the new oil turbulence
After the USA struck three nuclear facilities on the territory of Iran, the market’s reaction did not take long. Already on June 23, the price of the flagship Brent oil exceeded the mark of $77 per barrel, because it had been rising since the beginning of the month. This is the highest level since January 2025, when the previous jump was caused by panic in the market over a possible cut in supplies from Venezuela. However, unlike January’s turbulence, the situation now looks deeper and much less predictable.
On June 2, the benchmark crude traded at $64.86 a barrel, and during the following week gradually rose to $66.44, an average of 1-1.5% per day. Starting from June 10, the growth accelerated: in three days the price increased from $67.92 to $73.57 (+8.3%), and the biggest daily jump occurred on June 13 — +5.88%. After a minor correction on June 16 ($71.69, -2.55%), the market rallied again: on June 17, Brent added $3.33 (+4.64%), and on June 19 – another $3.10 (+4.12%), reaching a peak of $78.32. Despite a $2 pullback on Friday, June 20, the stock rebounded to $77.13 on Monday, June 23. Thus, in three weeks, Brent rose in price by 18.8%, and the dynamics of recent days indicate a high speculative sensitivity of the market to geopolitical risks and expectations regarding the Strait of Hormuz.
The American strikes became a qualitatively new signal, because the target was precisely strategic Iranian facilities related to defense and, presumably, nuclear infrastructure. This is no longer a story about curbing proxy groups or moderate diplomacy, but a demonstration of readiness to attack from the center, not from the periphery. In response, Tehran launched not only rhetoric, but also the procedure of legislative blocking of one of the most important energy arteries of the planet — the Strait of Hormuz. On June 22, the Iranian parliament voted to close it. Formally, this is not yet a decision of the executive branch, because the Supreme National Security Council and Supreme Leader Ali Khamenei have the final say. However, the very precedent of the vote, officially documented and broadcast in the media, has already created a certain effect. The market is used to signals, and in this case the signal is clear: Tehran is preparing not only to respond, but to use energy as a tool of war, perhaps even in the broadest sense of the word.
The Strait of Hormuz is an extremely vulnerable point, with approximately 20% of the world’s crude oil exports passing through it. Physically, its complete overlap is technically difficult – the width of the strait is 40-50 kilometers, a significant part of navigation routes is controlled by international forces, and major players, including Saudi Arabia, the UAE, Qatar, the United States and the United Kingdom, have their own interests and presence in the zone. However, all it takes is a few attacks on ships or the launch of drones in the direction of commercial traffic to send marine insurance skyrocketing, freight rates volatile, and major oil traders to renegotiate contracts or divert supplies.
It should be noted that on June 23, US Secretary of State Marco Rubio called on China to use its influence on Iran to prevent the blocking of the Strait of Hormuz. The US believes that it is Beijing, as one of the largest consumers of Iranian oil, that can restrain Tehran from actions that threaten not only regional security, but also the global economy. Rubio emphasized that the closure of the strait will cause much more damage to the economies of Asia than the American one, and that is why Washington does not expect neutrality from China, but intervention.
At the same time, analysts differ in their predictions about how far the new wave of tension will go. The most conservative estimates predict an increase in the price of Brent by 8-10% during July. Others, including energy analysts Barclays and Rystad Energy, allow scenarios of growth up to $100 per barrel — provided that shelling from both sides becomes regular and affects tanker logistics. In the case of the actual blocking of Hormuz, a number of experts are no longer talking about percentages, but about numbers: Brent at the level of $120-135 is the level of 2022, when the Russian invasion of Ukraine caused the first price shock in years.
Separately, it is worth paying attention to how quickly the tonality among investors has changed. If a week ago cautious assessments and expectations of a limited conflict prevailed, now the share of contracts with short execution periods on oil futures has increased sharply. This indicates short-term speculative activity inherent in periods of pre-crisis expectations.
Financial markets are reacting not only to a physical blockade or shelling, but to the prospect of a loss of predictability, and this is the main factor now. The strike on Iran didn’t just raise the temperature in the Persian Gulf, it set in motion a process of reformatting the world’s energy nervous system, where each subsequent piece of news can move the price not only of commodities but also of risk. And this is the cost of money, insurance, transport, reserves and, ultimately, the budget for those countries that do not have their own energy independence.
If the conflict drags on, the situation may develop into a full-fledged oil crisis. And even if a physical closure of the strait does not happen, the waiting effect itself has already set mechanisms in motion: insurers will raise tariffs, traders will limit sales volumes without re-signing contracts, and states will review domestic procurement plans. So, the world is preparing for a shock, but the question is how deep and how long it will be.
What happens to the world’s currency when the US attacks Iran
After the US missile strikes on Iranian military facilities, the financial markets went into reactive adjustment mode. In parallel with the jump in oil and volatility in stock indices, the world currency market recorded characteristic shifts – not catastrophic, but indicative from the point of view of capital priorities. The brightest marker was the US dollar index (DXY), which rose to a mark close to 99, the highest level in the last one and a half months. Demand for the dollar as a classic safe haven (protective asset) increased, and although the Federal Reserve did not make any emergency announcements, investors began to put in their strategies assumptions about reducing the probability of a rate cut in the summer in favor of holding a strong dollar to intercept global liquidity.
At the same time, the euro reacted restrainedly — a loss of 0.15% against the dollar indicates a gradual lowering of positions against the background of a general redistribution of capital. However, predictions have already appeared among ECB analysts that a potential prolongation of the conflict may hit the Eurozone due to dependence on imported oil and changes in logistics. This is especially critical for Germany, where industrial recovery after a technical recession directly depends on the availability of raw materials.
At the same time, the British pound lost 0.2%, demonstrating that London, despite maintaining its global financial status, is not considered an autonomous safe haven. The Australian dollar suffered a deeper decline — minus 0.7%. This is explained not only by geographical distance, but also by the vulnerability of the Australian economy to changes in global commodity trade, particularly in the steel sector, which is closely linked to Asian routes.
In contrast, the Japanese yen added 0.7% and was one of the few currencies to show growth. This behavior of the market is consistent with long-standing logic — the yen traditionally strengthens during periods of global tension, especially when it comes to regional conflicts involving the US rather than internal turmoil in Japan. The strengthening of the yen is also supported by the general expectation that the Bank of Japan will not rush to change its accounting policy, leaving attractive short-term speculative transactions with assets denominated in yen.
The Swiss franc fell slightly (–0.1%), which seems atypical for periods of tension. In part, this can be explained by mixed signals from the SNB, which at the previous meeting admitted the possibility of intervention in the rate in case of sharp volatility. Investors are not yet withdrawing capital from the franc, but they are also in no hurry to accumulate it in large volumes — at least until the scenario of a full-scale conflict is realized.
In general, the currency market showed that the strike on Iran was a signal to regroup. And here the key is not in daily percentages, but in the dynamics of expectations: the longer the conflict lasts, the more actively the market will revise the currency map, taking into account the risks of a logistical collapse, reformatting of oil flows and a possible secondary effect for capital markets.
Gold retreats, but does not surrender: how the market is behaving now
Despite the aggravation of the situation in the Middle East after the US strikes on the territory of Iran, the price of gold on June 21-23 slightly decreased by 0.4% to $3,350 per ounce. For an asset traditionally considered a defensive asset, this reaction seems counterintuitive, but it actually illustrates a structural reallocation of short positions in favor of the dollar. At the same time, some traders decided to quickly switch to the currency, which now provides greater liquidity and faster adaptation to news, especially in conditions of geopolitical turbulence. However, the local decrease does not change the overall dynamics of the year. Since the beginning of 2025, gold has already increased by almost 30%, and this trend remains valid. The reasons were several interrelated factors: the protracted war between Israel and Iran, increased tensions between the US and China, uncertainty surrounding the future of monetary policy in the EU and the US, as well as record demand for physical gold from the central banks of Asian countries.
The current correction is explained, first of all, by instantaneous transactions — the market is in a mode of waiting for further developments. If Iran actually implements the decision to close the Strait of Hormuz, or if the United States resorts to new direct attacks, gold will regain momentum. It should be noted that all previous peaks — including the breakthrough of the level of $3,000 per ounce in March 2025 — occurred precisely against the background of large-scale military operations or threats of a major conflict involving nuclear powers.
At the same time, the current level of $3350 means that the market is still pricing in the expectation of further shocks. Under normal circumstances — without the war in the Middle East and tensions in the Southeast Asian region — gold would be at $2,500-$2,700, and anything above that is a risk premium. Therefore, even if in the near future investors partially shift to the dollar or US bonds, gold will remain a strategic position. They do not get rid of it, but postpone it for several days. This is the main feature of the current market: fear has not gone anywhere, it is simply divided between assets. And while the dollar will gain strength in the short term, gold is a long-term play that still considers the geopolitics of 2025 to be a matter of a possible change in the global security architecture.
Bitcoin under pressure from geopolitics
On June 21, amid reports of US missile strikes on strategic facilities in Iran, the value of Bitcoin fell 6% — from $104,255 to $98,000. This was the deepest one-day decline in the price of the main cryptocurrency since the beginning of May. The fall is attributed to a change in sentiment among investors who traditionally prefer more liquid assets such as the US dollar, short-term bonds or gold in the face of sharp escalation. For a short moment, the crypto market lost the status of a “technical haven” and demonstrated its dependence on macro-events not only of a financial, but also of a security nature.
However, already on June 23, Bitcoin recovered to the level of almost $102,000, paring most of the previous losses. The recovery was quick and synchronized with the reduction of geopolitical pressure – until Monday there were no further attacks from the US or Iran, and the very fact of “controlled escalation” was interpreted by the market as a positive signal. Traders returned to Bitcoin amid a recovery in risk appetite, with Binance and Coinbase platforms seeing a significant increase in trading volume.
In addition to Bitcoin, other key digital assets also reacted to the events. Ethereum (ETH) lost 4.3% on June 21, falling from $5,570 to $5,330. On Monday, the price recovered to $5,490, which is almost back to pre-war levels. The dynamics of altcoins were similar: Solana (SOL) fell from $165 to $152 and rose to $159 on June 23; Avalanche (AVAX) fell 6% but recovered 3.5%. Such fluctuations demonstrate the general synchronicity of the digital asset market with geopolitical risks — primarily in the area of influence of the dollar and oil.
In general, the cryptocurrency market reacted sensitively, but not chaotically. Importantly, there was no mass liquidation of futures positions, which usually accompanies real collapses. This testifies to the relatively mature behavior of institutional players, who, unlike previous crises, limited themselves to short-term rebalancing without panic sales. Also, there were no significant technical failures on the stock exchanges, despite the increased trading volumes. Thus, Bitcoin and other cryptocurrencies have demonstrated that they remain sensitive to external factors, but no longer react destructively to them. Digital assets are increasingly behaving as part of the global financial environment, rather than an isolated market, events around Iran and the US only confirm this.
How the stock markets of the world reacted to the US strike on Iran
After reports of US missile strikes on Iranian facilities, global stock markets recorded moderate declines, without sharp falls or large-scale asset dumping. This suggests that investors have seen the escalation as a serious but so far contained incident, without the immediate development of a full-scale conflict. Yes, the S&P 500 fell 0.2% from a near-record high, a decline that suggests caution but not a loss of faith in large-cap assets.
In Europe, the situation is stable — the Stoxx Europe 600 has barely changed, and the DAX and CAC have remained within their previous levels. However, in Asia, the reaction was more extensive: Nikkei225 fell by 0.7%, which can be explained by the geographical proximity to the Persian Gulf and dependence on energy imports. China’s Shanghai Composite showed a slight decline of 0.2% — there was no panic reaction, but investors are taking into account the potential for a general slowdown in global trade.
The dynamics indicate that the stock exchanges perceived the event as a serious, but so far controlled blow to the region, without the expected full destabilization. Overall, markets remain in a short-term correction rather than the start of a bearish phase, although analysts at RBC Bank warn of the possibility of a 20% drop in the S&P500 if it escalates further. At the same time, S&P500 futures even rose after the initial decline, while the Dow and Nasdaq showed little movement.
The Japanese stock market reacted more noticeably — the Nikkei 225 index fell by 0.7%. Given Japan’s close security and economic ties with the United States, as well as its threatening proximity to a zone of potential geopolitical instability (including Iranian sea routes that target parts of Asian logistics chains), such a reaction is expected. The Japanese market is traditionally more sensitive to security challenges, especially when they could affect the cost of imported energy or cause disruptions in Asian supplies.
China’s Shanghai Composite index slipped 0.2% — a minimal decline that reflects a more neutral investor stance. Beijing does not officially take a hard line on the US-Iran standoff, so Chinese companies have not been targeted or at risk of direct sanctions. However, a decline in the index may be a sign of underlying expectations for a general slowdown in world trade or instability in raw material supplies.
So, the stock markets do not yet signal a global crisis — shares remain within the correction range, and the decline can be called a one-time risk review. However, indicators could deteriorate in the event of actual military action or a blockade of the Strait of Hormuz, which would put serious pressure on global supply chains and quotations.
In general, the dynamics of stock markets after the US strike on Iran remained within the limits of corrective volatility. All three key indexes declined, but did not go beyond the normal fluctuations characteristic of days with increased news pressure. This means that the markets expect further development of the situation, maintaining caution, but not moving to a phase reversal. However, expectations remain mixed, as further escalation may cause a deeper drawdown, but the controllability of the conflict, on the contrary, will trigger a return of investors to stocks in the near future.
What are the financial and strategic consequences of strikes on Iran for Ukraine
The global hydrocarbon market is entering a phase of steady price increases, and not only the Middle East, but also Ukraine is at the center of these changes. At first glance, rising oil and gas prices are a problem for consumers. In fact, for Ukraine it is primarily a win for Russia. Its budget is built on the export of hydrocarbons, and every additional 10-15 dollars per barrel is hundreds of millions of dollars that are reinvested in armaments, logistics, and mobilization. With Western aid becoming a political issue in the US and the EU and the pace of new weapons systems slowing, this financial injection is prolonging the conflict and raising the price of ending it.
However, the problem is not only that Russia gets more resources. And not only that the countries of the Global South, in particular India and China, are not ready to limit trade with Moscow. The main thing is that the escalation in the Middle East and the rise in energy prices are shifting the focus of US attention. Washington, which until now has been the main donor of Ukrainian defense, is forced to balance between supporting Kyiv, strengthening Israel, containing Iran and strategic confrontation with China in the Pacific region. This scattered agenda leaves no room for decisions that require focus, rhythm, and long-term political will, precisely the kind that military support for Ukraine requires.
As the West’s attention shifts and the global order is reshaped, we face a more dangerous situation, namely the reduction of access to weapons not only through political decisions, but also through physical scarcity. The production capacities of Western companies are already working at their limits. The parallel arming of Ukraine, Israel, and Taiwan and support for the modernization of their own armies by NATO countries led to the fact that the pace of production no longer catches up with the pace of consumption. Even if a political decision is made to provide more, there will be nothing to provide, and if there is, it will take longer, be more expensive and less expeditious.
For Ukraine, this means a new quality of war with a phase of resource depletion, in which the pace of hostilities will depend not on the wishes of the General Staff or decisions in Brussels, but on the availability of ammunition, the availability of transport corridors and the internal stability of the economy. At the same time, every month of delay in supply is a plus for the enemy, who now gains more than he loses.
Another direct line of influence is macroeconomic. The rise in global oil prices is already affecting Ukrainian inflation. Imported fuel, which is critical not only for civilian consumption but also for military logistics, is becoming more expensive. This entails a rise in prices in all sectors — from transport to construction. Even at a fixed hryvnia exchange rate, budget expenditures are becoming more difficult to finance, especially against the background of unpredictable external revenue schedules. Reserves of the National Bank allow you to keep the exchange rate under control, but their limit is not infinite. If the new round of escalation drags on, and the political support of the West turns out to be unstable, the hryvnia will leave the current corridor and move to a new level — conditionally 46-49 hryvnias per dollar.
This scenario is not catastrophic, but when combined with inflation, rising import prices, declining real purchasing power, and the need to contain social spending, it creates a cumulative effect. A business operating on the edge of survival may begin to wind down operations. Exports without stable port corridors will not be able to compensate for import dependence. And the financial sector will find itself in a situation where confidence in the banking system will again become vulnerable.
Another area is reserves. Ukraine has gold as part of gold and foreign exchange reserves, but its volume is insignificant compared to countries that formed gold reserves as strategic insurance. According to the NBU, the share of gold in the structure of reserves is 6–7%, which makes it a secondary instrument. According to the official data of the National Bank, as of June 1, 2025, the international reserves of Ukraine amount to 44.5 billion US dollars. The share of monetary gold in their structure is estimated at about 6-7%, which corresponds to the amount of about 2.7-3 billion dollars. According to market quotations, this is equivalent to approximately 27-29 tons of gold.
This volume is moderate in international comparison and does not provide an independent safety cushion in case of external financial shocks. Unlike countries that build up physical gold reserves as a strategic asset, Ukraine relies mainly on foreign exchange reserves, bonds of partner governments and lines of credit from international financial institutions. In the event of a delay in tranches or a political pause in aid, it is these external sources, not gold, that will determine the stability of the exchange rate, the ability to service social payments and critical imports.
Unlike China, Turkey or India, Ukraine cannot use this asset as a buffer in case of currency turbulence. If foreign aid is delayed, gold will not cover even one month of critical imports or servicing social obligations. Therefore, the financial stability of Ukraine will continue to depend on stable institutional support — the IMF, the EU, and the World Bank. If at least one of these partners loosens its obligations, the country will be forced to either cut spending, or look for money in foreign markets at higher rates, or resort to direct issuance. In any of these options, the consequences will not be technical, but political: from budget imbalances to a crisis of confidence, which always occurs faster than governments have time to react.
At the same time, cryptocurrencies, which at the beginning of the full-scale invasion were perceived as a channel for rapid mobilization of funds, lost this status. The global consolidation of regulation, especially within the G7 and the EU, is turning the crypto market into a controlled area. For the state, this means less maneuverability, more restrictions and dependence on payment gateways that are easily blocked. For the private sector, there are rising costs for servicing transactions, risks of sanctions and loss of flexibility.
A separate risk is diplomatic. Russia immediately took advantage of the change in priorities in the focus of the West. Making statements about the need to “prevent the region from a new war”, the Kremlin is trying to consolidate the position of a mediator. And even if these statements do not inspire confidence in the White House administration, for the states of Africa, Latin America and Southeast Asia, Moscow’s rhetoric sounds attractive. For them, Russia does not look like an enemy, but a player. At the same time, Ukraine risks losing its information monopoly. If earlier its war was the main topic in European capitals, now it is defocused between sectors: the Middle East, Taiwan, the Arctic, energy. The strength of the signal that Ukraine sends to the world is weakened because other signals have appeared that scream louder.
Against this background, a trend that is not yet recognized by all political players seems even more alarming. The model in which the US has played a dominant role in global security is cracking. In fact, the international system is entering the stage of multipolarity. Iran, China, India, Turkey, Saudi Arabia are not formally allies, but in fact already act as a coalition of self-sufficient interests. They do not coordinate actions with Brussels or Washington, but proceed from their own calculations. In such a world, Ukraine is no longer part of the US global leadership strategy, it has remained only one of the many foci of instability. And that is why our country may find itself in the zone of “controlled fading” if it does not propose its agenda.
Ukraine has no influence on the configuration of the conflict between the US and Iran, but depends on its consequences. If the escalation continues, markets will shift focus, energy prices will increase Russia’s budget, and Ukraine’s access to weapons will decrease. At the same time, external financing will remain the main source of stability, but its regularity is no longer guaranteed. Therefore, our country is not only at war, but also forced to survive in conditions where foreign wars have direct and tangible consequences for the state budget and the calendar of political decisions.
