Geopolitical Conflict Could Be a Game-Changer

A potential war involving Iran and Israel, possibly with U.S. involvement, is a looming risk. Such a conflict could disrupt the Strait of Hormuz, which handles about 20% of the world’s oil supply.

If oil prices spike dramatically (to $200–$300/barrel as Kostohryz speculates), it could trigger a global stagflation scenario—where inflation surges while growth collapses.

This kind of geopolitical shock, layered on top of the economic ones already in play, could deepen any market downturn significantly, even pushing drawdowns toward 50% or more, similar to the 2000–2002 bear market.