Aviva Investors Flags Prolonged Supply Shock Risk from Iran Conflict

Aviva Investors warns that the main challenge for global economies is a more pronounced and longer-term supply shock from the ongoing Iran conflict and disruptions in the Strait of Hormuz, where shipping of oil and goods remains uncertain. While no one knows exactly how events will unfold, the global economy has buffers and has weathered oil prices of $90-$120 per barrel before. Many countries are using subsidies or price caps to blunt the impact on households and businesses, though this carries fiscal consequences. This analysis comes amid gold's volatile trading, with spot prices up 1.5% to $4,578.89 per ounce on de-escalation hopes, yet poised for the worst monthly drop in over 17 years due to inflation fears from higher energy costs.