Petrol is up. Markets are down. What usually happens next?

The price on the bowser has never felt more personal. In the past five weeks, the cost of filling up has jumped by about 40%, groceries have crept higher and businesses from courier companies to cafes have started adding fuel levies to invoices that didn’t have them six weeks ago.  

The Iran war, whatever it means geopolitically, is showing up in the weekly shop and the monthly budget in ways that are hard to ignore. 

What history tells us 

Moments like this one feel unprecedented when you’re in the middle of them. The news is loud, the uncertainty is real and the temptation to act is strong. But markets have been here many times before and the pattern of what tends to happen next is more consistent than most people realise. 

Geopolitical shocks, however severe they feel in the moment, have historically been temporary disruptions rather than permanent ones. Markets sell off fast and broadly, which is exactly what’s happened so far. But they have also tended to recover over time.  

Data from Deutsche Bank found that, on average, the S&P 500 took 16 days to bottom following past geopolitical shocks. The average recovery took 109 days – which can seem like a long time but for those with a decades-long time horizon, it is little more than a footnote. 

Why oil prices aren’t telling the whole story 

Much of the volatility that is occurring right now can be traced back to what’s happening in energy markets. The price of Brent crude oil, which is up more than US$30/barrel in the past month alone (as at 31 March 2026), reflects current disruption.  

But futures markets, where traders bet on where prices are headed, tell a different story. According to CME Group (as at 30 March 2026), oil contracts for delivery in December 2026 are priced at US$77 per barrel, well below where prices sit today. This pricing suggests the market is not expecting the current level of disruption to become permanent. 

You may have also seen the word stagflation cropping up in headlines and news stories over the last week. Stagflation is an economic phenomenon which combines rising inflation, slowing growth and rising unemployment all in a sustained manner. While that sounds concerning, we are nowhere near that point now. Right now, the first ingredient is present. However, the second and third risks are just that – risks that have not clearly materialised yet.  

In other words, stagflation is a risk worth monitoring but it is not the headline act. And for many investors, one appropriate response to a risk that hasn’t arrived may be to simply stay the course and tune out the noise. 

What this means for your investments 

Periods like this tend to create a strong sense that something needs to be done. Markets are falling, headlines are constant and portfolios look different to how they did only weeks ago. 

But this is also where the gap between instinct and outcome tends to open.  

Falling markets don’t just reduce values, they change the terms of investing. What happens during these periods often matters more than what happens at the peak. Against that backdrop, a few principles tend to hold. 

• Your regular contributions are working harder than you think: Every dollar going into a falling market buys more units than it did six weeks ago. Some investors benefit from recoveries by continuing to contribute through the drawdown. 

• Check your allocation, not your balance: If the past month has felt genuinely alarming rather than just uncomfortable, check whether your current portfolio reflects your risk tolerance. 

• The number on your screen isn’t necessarily a loss yet: A portfolio that is down 8-10% on paper is what someone would pay for those assets today, in this specific window of maximum uncertainty. Selling converts a temporary mark into a permanent one. 

• Consider whether volatility has created an entry point: Corrections are uncomfortable when you’re already invested. They look different when you have cash sitting on the sidelines. If you’ve been waiting to put money to work, a broad market down 10% could be a better starting price than one at its peak. 

• Reduce the daily noise: While the severity and duration of this conflict will influence market direction, those outcomes are inherently hard to predict. For investors, the focus should be on staying informed without reacting to every headline. 

None of this is to say the conflict resolves quickly, or that markets won’t fall further before they recover.  

History shows that in uncertain periods, the investors who tend to come through best are not necessarily those who react fastest, but those who remain disciplined, keep perspective and stay focused on their long-term goals.