The repercussions of the Iran war that began on Feb. 28 might last longer than expected, even if military operations end in a few weeks. This risk isn't fully priced into oil, equities, or options volatility.

Investors must contemplate the potential of violent price fluctuations if the shipping industry fails to quickly return to normal tempos. That could cause the markets to pull back on fears oil prices could surge even more.

Iran has already surprised some military and intelligence strategists by shuttering the Strait of Hormuz, the world's most important oil choke point. It was expected to allow ships to pass because some 80% of Iran's revenue comes from oil sold to China via that shipping lane. The income is vital because Iran's economy is weak, yet Goldman Sachs estimates that reported vessel traffic is down 97%.

So much has happened that it is easy to forget that protests erupted in Iran in late 2025 because of high inflation. In January, college students demonstrated, as did merchants in Tehran's Grand Bazaar. Others have clamored for Reza Pahlavi, the son of the last shah, to return.

Since then, the U.S. and Israel have pre-emptively attacked Iran to eliminate its nuclear ambitions. Iran's leader, Ali Khamemni, was killed in airstrikes. His son succeeded him, and the war shows no sign of abating despite reports that Iran's military command structure was destroyed.

In reaction, shipping companies are rerouting tankers, often via the Cape of Good Hope at the bottom of South Africa. The longer route creates structural challenges in the shipping industry that could take longer to resolve even if the war ends soon.

One of the issues is the unwillingness of executives to expose tankers to drones and mine attacks, even if U.S. and allied military forces assume control of the strait.

Saudi Arabia and United Arab Emirates pipelines bypass the strait, but those volumes are about 10% of the sea lane.

The risk for investors is that the war lasts longer than expected, and that the shipping industry takes even longer to recover.

We have been stress-testing our previous suggestion that investors monetize the conflict to buy desired stocks at lower prices and to plan for a stock rally in six months. Before the war began, we recommended investors hedge against a potential decline with put-option spreads on the State Street SPDR S&P 500 exchange-traded fund, and by selling cash-secured puts to buy stocks on declines. We also recommended positioning for stocks to rally with call-option spreads.

These options strategies remain our preferred way of handling the war, but they were made in anticipation of a quick victory. If we were wrong on the timeline -- and that is a greater risk now -- the recent weakness in financial markets could be an amuse-bouche before a bearish feast.

As often happens when difficulties arise beyond Wall Street's control, investors are crying out for government help. The preferred bromide tends to be lower interest rates. The Federal Reserve's rate-setting committee concludes a two-day meeting on Wednesday that will provide important insight into how the world's most important central bank views the economic impact of the Iran war.

Present conditions cloud the transparency needed for markets to operate smoothly. Every headline could spark a rally or a sharp decline.

We raise that heightened potential for price volatility, even if it is obvious, as a reminder that this is one of those times when it is better to be patient and let information flow into markets before acting.

Yes, you might miss a chance to make money, but it is more important that you have an informational edge to lower the odds of losing it. When the next few moves in the markets are harder to predict, why embrace risk?