Global markets have shifted into retrospective mode, looking back at the market dynamics triggered by Russia’s 2022 invasion of Ukraine as a template for what might play out after the recent Middle East conflict. Both episodes have produced sudden energy market shocks and bolstered the dollar, but important differences are emerging in how the rest of the financial complex is behaving.
Energy markets have been at the center of the move. Brent crude has climbed sharply - up roughly 40% since the U.S.-Israel strikes two weeks ago - and was near $120 on Monday. That magnitude of movement recalls the turbulence seen in early 2022, when Brent also posted a big two-week jump, although that rise was closer to 15% at the two-week mark and culminated in the steepest prices since 2008.
“The oil market has moved from an essentially frictionless supply-side world for the decade or two before the pandemic, to what is now a world that is being consistently hit by one supply shock after another,” said Richard de Chazal, a macro analyst at William Blair. The implication, as investors see it, is that oil remains the most direct conduit from geopolitical conflict to inflation and market stress.
Currency markets have tracked the shift toward perceived safety. The dollar has strengthened about 2.6% since the Middle East conflict began, a gain that matches the U.S. currency’s rise over the same span in 2022. That bid for the dollar has accompanied a classic repositioning toward safe-haven assets for some investors.
Where the parallels end
While the oil and dollar moves recall 2022, other parts of the market are not mirroring that episode. European wholesale gas prices have risen nearly 58% since the recent conflict erupted, a significant increase but far less extreme than the nearly four-fold surge seen in 2022. The muted gas response this time reflects, at least in part, Russia’s outsized role as a gas supplier in the earlier crisis - a dynamic that is not identically replicated with the Middle East conflict.
Safe-haven dynamics have also diverged. Germany’s 10-year Bund yield has jumped about 30 basis points since the Iran war began, whereas four years ago the same benchmark fell by more than 10 basis points in the immediate aftermath of hostilities. That swing points to a faster market pass-through this time of expectations for rising inflation into bond yields.
Indeed, markets appear to be quicker to price in prospective inflation than they were in the opening stages of the Russia-Ukraine conflict. In 2022, yields initially fell before surging higher as inflationary pressures became clearer. Today, those immediate moves are already being reflected to a greater degree in yields. Yet the euro zone’s five-year forward inflation swap - a gauge of medium-term inflation expectations - remains anchored at roughly 2.18%, close to the ECB’s 2% target, suggesting that longer-term inflation expectations have not dislodged.
Asset-class reactions: gold, equities, volatility
Gold, often used as a catch-all hedge in crises, has behaved differently across episodes. When Russia invaded Ukraine in 2022, bullion spiked almost 8%. Since the new conflict began, gold is down about 3%. RBC strategist Christopher Louney said the direct link from the current crisis to energy markets reduced the need for a broad-based hedge, a factor that, together with higher bond yields and a firmer dollar, has weighed on the metal.
Equities have also shown a different profile. European stocks fell about 10% within the first two weeks after Russia’s invasion in 2022; in the present episode the drop is closer to 5%. Geography and energy dependency were significant in 2022 - Europe was both nearer to the conflict and more dependent on Russian energy supplies. While the Middle East conflict is farther away, Europe’s energy import dependence still leaves it exposed, and strategists at Barclays warned that Europe’s STOXX 600 index could move toward 550 points if oil remains near $100 - a roughly 13% decline from its closing level on February 27.
Volatility measures tell a mixed story. The CBOE oil volatility index has surged to a five-year high of 120%, exceeding its post-Ukraine peak of about 102 in 2022. By contrast, equity market volatility is running warm but not at crisis levels: the VIX sits near 25, below its highs in April 2025 of 60 and far below COVID-era peaks around 80. For comparison, the VIX hit a high of 38 in February 2022 before retreating.
Bond volatility has risen too. The ICE BofA MOVE index, which gauges bond market moves, is at 95 - its highest since June 2025 - though still lower than its early March 2022 high of about 140. Foreign exchange volatility, by contrast, has barely moved.
Inflationary backdrop and central bank response
Analysts note that the underlying inflationary drivers present now are similar to those seen four years ago, when a post-pandemic inflation surge prompted aggressive rate hiking by central banks around the world. George Lagarias, chief economist at wealth manager Forvis Mazars, pointed to the trade war as an underlying inflationary force that could be magnified if oil prices rise further. He observed that the global economy is weak now because of that trade war and that higher oil could exacerbate price pressures.
Still, Lagarias downplayed the prospect of immediate policy tightening on the same scale as 2022. He said central banks would likely need to see sustained readings of real inflationary pressure in core inflation for two to three months before shifting policy, and he suggested that any such readings would probably not be attributable to Iran.
Bottom line
Markets are finding familiar patterns in the current Middle East conflict - most notably through sharp oil moves and a stronger dollar - but the rest of the financial landscape is not a carbon copy of 2022. Gas prices, yields, gold, equities and volatility measures are each writing somewhat different stories, reflecting differences in geography, supply dependencies and the speed with which markets are pricing inflation expectations. For investors and policymakers, that mixed response underscores both the immediate importance of energy markets and the limits of direct historical analogy.