Zhang Yidong, chief economist and executive committee member at Haitong International, warns that recent violence in the Persian Gulf is symptomatic of a deeper reordering of global power rather than a one‑off shock. He argues markets may overshoot in the short term, but the durable consequence will be a strategic revaluation of assets that underpin security: gold, aerospace and defence, certain non‑ferrous metals and, to a lesser degree, crude oil.
Zhang says the current instability in the Gulf should be read as part of an era‑wide reconfiguration of international order — a return of geopolitics to the centre of economic calculation. In this environment, he expects market behaviour to emphasise “transportation risk” ahead of pure supply disruption. Insurance and freight rates for tankers, he notes, often move first and more sharply than benchmark oil prices as traders price the risk of contested shipping lanes.
On the military question, Zhang judges that the United States is unlikely to pursue a single decisive ground operation to remove Iran’s capabilities. If Washington strikes, he suggests the likeliest approach is a campaign of sustained, deep air strikes combined with short, targeted “decapitation” missions rather than a full‑scale invasion. That outcome would intensify markets’ risk aversion without producing the open‑ended closure of the Strait of Hormuz that would trigger sustained oil shortages.
For commodity markets, Zhang draws a distinction between tactical and structural responses. If the crisis does not escalate into prolonged disruption of shipping routes or large‑scale ground war, oil and tanker markets should see a risk‑driven spike followed by a reversion to fundamentals; the freight risk premium, however, is liable to persist longer than the oil price itself. Over the medium term he foresees a tug‑of‑war between military pressure and periodic probing, lifting the strategic value of crude as a geopolitical asset.
Looking beyond hydrocarbons, Zhang places greater conviction behind gold and quality defence equities as long‑term portfolio hedges. He sees gold’s upside tied to the broader breakdown and reconstruction of international economic and financial arrangements, while defence and aerospace gain from rising geopolitical risk, expected increases in military spending and a market repricing of “security industries.” In a lull between bouts of escalation, he says, gold and well‑capitalised defence firms will prove more resilient and offer steadier allocation value than oil producers or shipping stocks.
For investors and policy‑makers the message is twofold: expect heightened volatility and selectivity. Tactical trades can exploit spikes in freight and oil volatility, but strategic allocations should tilt toward assets whose valuation is likely to rise as states reorganise their security postures. The cost of underwriting secure supply chains and military readiness will increasingly be capitalised into markets, making security‑linked assets a more persistent feature of global portfolios.