Middle East Conflict: Financial System, Corporate Exposure and Credit Risk

The recent coordinated U.S. and Israeli military strikes against Iran, part of "Operation Epic Fury" launched on 28 February 2026, have triggered immediate "risk-off" sentiment across global financial markets. What began as geopolitical tension has now spilled over into multiple asset classes, reshaping investors' expectations and financial market behaviour worldwide. The conflict has triggered widespread risk to critical energy infrastructure, shipping routes and market access throughout the Middle East. Diplomatic efforts stalled, and unless pressured, a prolonged campaign appears likely. The situation threatens global supply chains and energy flows, with the Strait of Hormuz and Red Sea especially vulnerable, heightening regional and global macro risks.