Henry Obegi Research

Historical Precedents

10 Geopolitical Events | 1973 to 2022

S&P 500 Response Overlay

Oil Price Response

VIX Response

S&P 500 Return Intervals

Event 1 Day1 Week1 Month 3 Months6 Months1 Year
1990 Gulf WarN/AN/AN/AN/AN/AN/A
2003 Iraq War+1.7%-1.1%+1.7%+13.5%+18.7%+26.0%
2011 Libya Intervention+1.6%+2.8%+2.2%-0.6%-4.9%+10.2%
2017 Syria Strikes+0.1%-0.3%+1.8%+3.0%+8.2%+12.7%
2018 Iran JCPOA Exit+1.0%+1.6%+3.9%+7.0%+2.4%+7.4%
2019 Aramco Attack-0.3%-0.9%-1.7%+5.3%-20.3%+12.4%
2020 Soleimani+0.4%+1.0%+2.1%-23.0%-1.7%+14.4%
2022 Russia-Ukraine+2.2%+1.7%+5.7%-7.2%-2.1%-7.1%
1979 Iranian Revolution-2.6%-1.0%0.0%+4.0%+3.0%+8.0%
1973 Oil Embargo0.0%-1.0%-5.5%-10.0%-17.0%-42.0%
MEDIAN+0.4%-0.3%+1.8%+3.0%-1.7%+10.2%
Pattern. In 8 of 10 events, the S&P 500 was positive within 1 year. The median 1-year return is +10.2%. The median recovery time is 131 trading days. The two exceptions were the 1973 Oil Embargo (sustained supply disruption) and events that coincided with independent bear markets (2022 Ukraine + rate hikes).

Event Details

1990 Gulf War 1990-08-02

Iraq invades Kuwait. US-led coalition mobilizes, then liberates Kuwait in Jan 1991. Oil doubled from $17 to $36/bbl. S&P 500 fell ~17% over 3 months before recovering.

S&P 1D: N/A S&P 1M: N/A S&P 1Y: N/A Oil 1M: -6.1% Max DD: 0.0% Recovery: None days

2003 Iraq War 2003-03-20

US invades Iraq. Markets had sold off in prior months on uncertainty. Invasion day was a relief rally. S&P rallied ~30% over 12 months.

S&P 1D: +1.7% S&P 1M: +1.7% S&P 1Y: +26.0% Oil 1M: -2.0% Max DD: -5.5% Recovery: 11 days

2011 Libya Intervention 2011-03-19

NATO airstrikes begin in Libya. Oil spiked ~15% on supply disruption fears. Markets dipped briefly then recovered within weeks.

S&P 1D: +1.6% S&P 1M: +2.2% S&P 1Y: +10.2% Oil 1M: +4.7% Max DD: -6.9% Recovery: 155 days

2017 Syria Strikes 2017-04-07

US launches 59 Tomahawk missiles at Syrian airbase. Markets barely reacted. S&P was flat on the day, continued upward trend.

S&P 1D: +0.1% S&P 1M: +1.8% S&P 1Y: +12.7% Oil 1M: -12.7% Max DD: -1.9% Recovery: 8 days

2018 Iran JCPOA Exit 2018-05-08

Trump withdraws US from Iran nuclear deal, reimposing sanctions. Oil rose ~20% over 6 months. S&P fell ~5% over next 2 months.

S&P 1D: +1.0% S&P 1M: +3.9% S&P 1Y: +7.4% Oil 1M: -5.1% Max DD: -3.4% Recovery: 183 days

2019 Aramco Attack 2019-09-14

Iran-linked drones strike Saudi Aramco Abqaiq facility, knocking out 5% of global oil supply. Oil spiked 15% on Monday open, recovered within 2 weeks.

S&P 1D: -0.3% S&P 1M: -1.7% S&P 1Y: +12.4% Oil 1M: -2.3% Max DD: -4.3% Recovery: 176 days

2020 Soleimani 2020-01-03

US drone strike kills Iranian General Qasem Soleimani in Baghdad. S&P fell 0.7% on the day, VIX spiked to 14.5. Markets recovered within 1 week.

S&P 1D: +0.4% S&P 1M: +2.1% S&P 1Y: +14.4% Oil 1M: -20.8% Max DD: -34.1% Recovery: 107 days

2022 Russia-Ukraine 2022-02-24

Russia invades Ukraine. Oil spiked 25% in first 2 weeks, hitting $130/bbl. S&P fell ~13% from Jan to Jun 2022 (combined with rate hikes).

S&P 1D: +2.2% S&P 1M: +5.7% S&P 1Y: -7.1% Oil 1M: +21.7% Max DD: -15.6% Recovery: None days

1979 Iranian Revolution 1979-01-16

Shah of Iran deposed. Oil doubled from $14 to $34/bbl by mid-1979, peaking at $39.50/bbl in April 1980 (+182%). Iran production collapsed from 5.5 to under 1 mb/d. S&P dipped 2.6% initially but recovered within 3 trading days. Gold surged to $843/oz by January 1980 (+271% from start of revolution). Source: Federal Reserve History, Brookings Institution.

S&P 1D: -2.6% S&P 1M: 0.0% S&P 1Y: +8.0% Oil 1M: +15.0% Max DD: -3.0% Recovery: 3 days

1973 Oil Embargo 1973-10-17

OPEC declares oil embargo against the US and allies supporting Israel in the Yom Kippur War. Oil quadrupled from $2.90 to $11.65/bbl (+302%). S&P 500 fell 48.2% peak-to-trough (Jan 1973 to Oct 1974). Did not recover pre-embargo levels for 5.8 years (July 1980). The worst bear market since the Great Depression. Source: FRED, Federal Reserve History.

S&P 1D: 0.0% S&P 1M: -5.5% S&P 1Y: -42.0% Oil 1M: +30.0% Max DD: -14.0% Recovery: 1462 days