11:00 CET
Reaction to Iran conflict from Robeco EM Fundamental Equities team
By Jan de Bruijn, Client Portfolio Manager
The US and Israel’s coordinated large scale strikes on Iran since 28 February have drawn significant response from Iran, closing airspace in the Middle East and impacting commercial shipping in the Arabian gulf. Both nations’ governments framed the operation as a pre emptive move to blunt emerging threats, while US officials signaled a desire to encourage internal political change within Iran. With reciprocal strikes continuing, the near term outlook remains volatile, and diplomatic efforts have yet to establish any meaningful stabilization pathway.
This escalation introduces a significant geopolitical shock with implications across asset classes. Elevated uncertainty has generated immediate risk off in equity markets with the MSCI Emerging Markets Index down 1.8%, MSCI Asia Pacific Index down 1.8%, Stoxx Europe 600 down 1.8% and in the US S&P 500 futures down 1.5%.* Commodities were broadly higher with Brent crude oil up 9.6% at USD 76.9 per barrel and Gold up 2.5% at USD 5,410 per ounce.
A prolonged conflict will increase the risk of new sanctions, maritime restrictions, and rapid shifts in Western security postures, all of which could affect capital flows and cross border trade dynamics. Clients should expect short term volatility and be prepared for scenario driven swings in global risk sentiment.
Energy equities are positioned at the center of this shock. Crude prices are likely to remain elevated due to heightened supply disruption risk, especially given Iran’s strategic position near the Strait of Hormuz, one of the world’s most critical oil transit corridors, which is de facto closed at the time of writing as marine insurers have withdrawn coverage. Crude oil exports from Saudi Arabia’s Ras Tanura sea island remain normal but the question is whether the cargoes will be able to exit the gulf.
Fund positioning:
The Gulf Cooperation Council (GCC – political and economic alliance of six Middle Eastern countries: Saudi Arabia, Kuwait, Oman, Qatar, UAE & Bahrain) accounts for 5.6% weight in the MSCI EM Index (as at 31 January 2026). All Robeco Emerging Markets strategies are underweight the region with the only overweight being in UAE.
Both flagship funds are somewhat underweight the oil and gas sector but given the uncertainties surrounding events, we will closely monitor the situation as it unfolds.
*Source: Bloomberg 0943 CET, 2 March 2026
