The conflict in Iran has taken a new turn in recent days, with strikes on several oil facilities and Iran’s stated intention to block the Strait of Hormuz, driving up oil prices.
Rising crude prices are bad news for oil‑importing economies such as the euro area, but the impact differs depending on whether the shock is permanent or temporary.
Our analysis
Unlike in past episodes of market stress, sovereign bonds didn’t get the usual “flight‑to‑quality” support this week. Concerns about inflation, driven by rising oil and gas prices, kept investors from seeking refuge in government debt. As a result, sovereign bonds fell broadly in line with AT1s, and even German debt saw yield increases similar to those of peripheral issuers.
Although this might make it feel as though investors had nowhere to hide during the sell‑off, it’s worth remembering that some strategies are built to step outside the market’s directional swings. By actively managing duration and credit exposure with an absolute return approach, these periods of volatility can be turned into investment opportunities.
Written on March 6, 2026. Opinions subject to change. This document has no pre-contractual or contractual value. It is provided for information purposes. The analyses and/or descriptions contained in this document should not be considered as advice or recommendations from Lazard Frères Gestion SAS. This document does not constitute a recommendation to buy or sell securities, nor does it encourage investment. This document is the intellectual property of Lazard Frères Gestion SAS - 352 213 599 RCS Paris 25, RUE DE COURCELLES - 75008 PARIS
