Analyst Warns Of 'Serious Escalatory Tit-For-Tat Cycle' If Iran Strikes Back, Raising Fears Of 'Wider War' In Middle East

Amid rising tensions in the Middle East, Helima Croft predicts “serious Iranian retaliation” that could lead to broader regional conflict.

What Happened: On Thursday, Croft, an analyst at RBC Capital Markets, expressed concerns over the potential repercussions of the recent escalation in the Middle East.

During CNBC “Last Call,” Croft warned, “We are bracing for serious Iranian retaliation.”

“You could see a serious escalatory tit-for-tat cycle that leads to a wider war in the region.”

Croft added that Iran has the potential to repeat its playbook from 2019 when it allegedly attacked oil tankers in the Strait of Hormuz, a critical waterway for oil import and export. She expressed that Iran only needs to launch attacks on a few oil tankers to push the oil prices higher.

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Why It Matters: The assassination of a top Iranian general by Israel has led to a spike in oil prices and is negatively affecting stock markets as investors worry about the potential for inflation. This event has heightened concerns of a broader conflict, which could have far-reaching consequences for global markets. The situation is particularly tense as Iran has vowed revenge against Israel, causing Israeli-related stocks and exchange-traded funds (ETFs) to suffer due to investor apprehension.

While large tech companies seem to be weathering the storm, the broader Israeli market is facing downward pressure as the threat of Iranian retaliation looms over the region.

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