German Finance Minister Klingbeil saying he expects the fallout of the Iran war to persist signals a prolonged geopolitical premium on energy and transport routes. In the current market backdrop—already-high valuations, Brent elevated and Strait of Hormuz transit risks—this increases downside risk for risk assets and raises stagflation concerns. Expect sustained upside pressure on oil and related energy equities (higher revenues but political/tax/regulatory scrutiny risk), cyclical pain for airlines, shipping and tourism (route disruptions, higher fuel costs), and upside for defense stocks and safe-haven assets (gold, USD, JPY, CHF). Prolonged conflict also increases inflation persistence risk, which could keep the Fed “higher for longer” and amplify downside sensitivity in richly valued growth stocks. Market segments: - Negative: broad equities (especially travel, leisure, EM equities, insurance), commodity-exposed importers, European exporters sensitive to regional disruption. - Positive/relative outperformers: Oil producers and refiners, defense contractors, energy infrastructure/servicers, gold and other safe-havens, FX safe-haven pairs. FX relevance: USD likely to strengthen on safe-haven flows (EUR/USD down); JPY and CHF likely to appreciate (USD/JPY moves), and higher oil prices can widen current-account pressures for importers, affecting EUR and other commodity-importing currencies.