Mounting unrest in Iran is raising fears of heightened financial market volatility, according to Lee, a senior strategist at Lombard Odier. The situation could impact oil prices and regional asset classes.
- Brent crude oil prices fluctuated by over 8% in 10 trading days amid protest-related concerns.
- Tehran Stock Exchange index declined 17% year-to-date as of January 2026.
- Iranian rial lost 23% of its value against the U.S. dollar since December 2025.
- Over 150 civil unrest incidents reported in Iran since late December 2025.
- Regional equities exposure reduced by 5.4% on average among major financial institutions.
- Oil futures for March 2026 peaked at $98.50 per barrel during peak volatility.
Unrest across several Iranian cities has intensified in recent weeks, prompting global financial observers to reassess risk exposure in Middle Eastern markets. Lee, a senior strategist at Lombard Odier, highlighted that sustained protests could disrupt oil supply chains and trigger sharp movements in commodity prices, particularly Brent crude, which has fluctuated by over 8% in the past 10 trading days. The current situation follows a series of demonstrations sparked by economic grievances and political discontent, with reports indicating that more than 150 incidents of civil unrest have been documented since late December 2025. These developments have led to increased scrutiny of regional equities, particularly those listed on the Tehran Stock Exchange, which has seen a 17% decline in index value since the beginning of the year. Market participants are particularly concerned about potential spillover effects on global energy markets. Oil futures contracts for March 2026 delivery traded as high as $98.50 per barrel amid speculation over possible supply disruptions. Additionally, regional currencies such as the Iranian rial and Turkish lira have shown signs of depreciation, with the rial losing 23% of its value against the U.S. dollar over the same period. Investors across Europe and Asia are now factoring in a higher risk premium for assets exposed to geopolitical instability. Major financial institutions have adjusted portfolio allocations, reducing exposure to Middle Eastern equities by an average of 5.4% in the last two weeks, according to internal tracking data. The potential for prolonged instability could also influence central bank policy decisions, particularly in emerging market economies reliant on energy exports.