Middle East Crisis Shakes Markets as Oil and Gold Surge Amid Iran Tensions
Rising tensions in the Middle East have sent shockwaves through global markets, pushing oil prices higher and disrupting travel. The conflict between Iran and Western allies escalated in late February, triggering a sell-off in European banking stocks. Deutsche Bank, in particular, saw its share price drop sharply before a slight rebound by midweek.
The crisis began intensifying in early 2026, with mass protests in Iran in January and US-Israel airstrikes on February 28. Iran's retaliation deepened market instability, lifting oil prices by 2.5 cents per litre in Europe and driving investors toward safe assets like gold. Airlines such as Lufthansa suspended Middle East routes until March 7, squeezing revenues and raising insurance costs for carriers.
European banks faced heavy losses as the conflict weighed on market sentiment. Deutsche Bank's stock plunged over 9 percent at the start of the week, extending a correction that had been underway since January. By Wednesday, however, the shares recovered modestly, with analysts suggesting further gains could follow.
JPMorgan downplayed the sell-off as excessive, arguing that investment banks—including Deutsche Bank—might actually benefit from increased volatility. The US bank described Deutsche Bank's stock as undervalued but stopped short of issuing new buy ratings or raising price targets. While core Eurozone inflation climbed to 2.41 percent in February, broader risks to European banks remain unclear beyond Deutsche Bank's immediate exposure.
Deutsche Bank's share price now hinges on how the Iran conflict unfolds and how markets respond. A rebound remains possible if tensions ease, but the bank's performance will stay tied to wider geopolitical developments. Meanwhile, higher energy costs and inflation pressures continue to shape Europe's economic outlook.
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