Weekly Outlook: It All Comes Down to Oil

High oil prices threaten to slow down the economy—and reignite inflation, which has only just been brought under control. Most people still expect the war in Iran to end soon. But confidence is fading.

March 16, 2026. FRANKFURT (Deutsche Börse). There is no end in sight to the war in Iran. “At the moment, there is no sign of a ceasefire or even the overthrow of the mullah regime,” notes Christian Henke of IG. And the longer the war in Iran lasts, the more devastating the negative impact on the global economy will be. According to Claudia Windt of Helaba, there are also no signs of the imminent end to Operation “Epic Fury” promised by U.S. President Trump. “For the financial markets, the duration of the war is crucial. The faster energy prices normalize, the less severe the negative effects on inflation and the economy will be.”

Most recently, the oil price has even risen again. A barrel of Brent crude cost $106 on Monday morning; before the outbreak of war, it was around $70. Stocks remain under pressure: The DAX (DE0008469008) stood at 23,466 points on Monday morning, up from 23,447 at Friday’s close. The Stoxx Europe 600 (EU0009658202) continues to trade below 600 points. U.S. markets closed with losses again on Friday.

Gold Price Actually Falls

It is striking that traditional safe-haven assets are not benefiting. This is because, in anticipation of rising inflation, interest rates have also risen significantly, and the prices of German government bonds and U.S. Treasuries—which are considered safe—have fallen. Gold, which pays no interest, is becoming less attractive. The price of gold (XC0009655157) has recently declined and is currently even slightly below $5,000 again. It reached an all-time high of $5,570 in January.

In its baseline scenario, Helaba assumes a rapid end to the operation. The impact on capital market forecasts would therefore remain limited. However, it now expects slightly higher inflation for Germany in 2026, specifically 2.4 percent versus 2.1 percent. Nevertheless, the sharp rise in oil prices increases the downside risk to the economic forecast, particularly for Germany. “Here in Germany, the oil price shock is jeopardizing the emerging recovery,” explains Windt.

Financial Markets as Disciplinarians?

According to Robert Halver of Baader Bank, however, the current situation can only be compared to the 2022 energy price shock to a limited extent. “Back then, a dramatic supply shortage following lockdown-induced production shutdowns coincided with an equally dramatic excess of demand after the lifting of COVID-19 restrictions,” he explains. He does not currently see such severe imbalances. Despite the importance of the Strait of Hormuz, he notes, there are alternative supply routes. For instance, Europe and Germany import most of their oil from other sources, such as the U.S.

“Similarly, Trump’s statements point to his typical about-faces as soon as the pressure from the economy and financial markets becomes too great,” he adds. While it would take several weeks to ramp up oil and gas production in the Middle East region, “the old adage will then apply again: markets—and thus energy markets—pay for the future.”

Beyond Iran: “A Relatively Solid Outlook for Stocks”

“From Venezuela to Greenland to Iran: The first few weeks of 2026 have clearly shown that the geopolitical turmoil of last year continues to affect investors this year as well,” explains Dejan Djukic of Berenberg Bank. However, global stocks have so far avoided major losses. “Emerging markets have even gained more than 9 percent,” he notes. According to Djukic, the future performance of equities depends primarily on the situation in Iran and, in particular, in the Strait of Hormuz. However, a sustained disruption to oil supplies from the region is rather unlikely. Furthermore, aside from the Iran conflict, there is relatively little to suggest a significant sell-off in the market. “Expansionary monetary and fiscal policy, solid macroeconomic data, a decent earnings season, and improving seasonality paint a relatively solid picture for stocks.”

Interest Rate Decisions in the Shadow of the Iran War

A whole series of central bank meetings are scheduled for this week, most notably those of the U.S. Federal Reserve on Wednesday and the ECB on Thursday. In addition, the British, Canadian, Japanese, Swiss, and Swedish central banks, among others, will decide on their key interest rates. Meanwhile, earnings season is drawing to a close: from the DAX, only Vonovia remains to report, along with many companies from the MDAX and SDAX. 

Key Economic and Business Data

Monday, March 16

3:00 a.m. China: Retail sales/industrial production for February.

NVIDIA GTC. Start of the leading global AI conference for developers, researchers, and managers.

Tuesday, March 17

11:00 a.m. Germany: ZEW Economic Sentiment Survey for March. As DekaBank notes, the ZEW survey marks the second sentiment gauge released since the outbreak of war in the Middle East. Increased uncertainty and rising energy prices have recently led to a slight downward revision of economic forecasts, which will also be reflected in lower economic expectations.

Wednesday, March 18

7:00 p.m. U.S.: Federal Reserve interest rate decision. According to DekaBank’s assessment, the Fed is unlikely to cut the benchmark interest rate this time either. However, differences among FOMC members regarding monetary policy assessments are likely to widen significantly again. This is because there are good reasons for both an immediate cut (labor market, war with Iran) and for maintaining rates (price trends).

Thursday, March 19

Japan: Bank of Japan interest rate decision.

1:00 p.m. United Kingdom: Bank of England interest rate decision.

2:15 p.m. Eurozone: ECB interest rate decision. The ECB is expected to keep its key interest rate unchanged at 2.15 percent. Although inflation rose slightly to 1.9 percent in February, as noted by Deutsche Bank, it remains below the 2 percent target. However, given concerns about high energy prices, communication regarding the monetary policy outlook will be closely watched.

Friday, March 20

Initial public offering (IPO) of defense supplier Vincorion