Ken Fisher: The Iran War Is Following This Three-Phase Pattern
Ken Fisher outlines a three-phase pattern observed across nine post-1980 energy-centric conflicts, explaining how oil prices and stock markets behave predictably before, during, and after fighting begins. He applies this framework to the Iranian conflict, noting that falling oil prices and rising stocks to all-time highs are consistent with the third phase. Fisher concludes that oil prices 6-12 months after a conflict begins are typically lower than pre-conflict levels.
Summary
Ken Fisher begins by acknowledging that the rapidly evolving Iranian conflict makes specific commentary quickly outdated, but argues that a structural pattern he has identified remains durable and relevant. He references nine energy-centric conflicts in the post-1980 era as the empirical basis for his three-phase framework.
Phase one occurs before fighting begins. As geopolitical tensions build, oil prices rise due to speculative activity in liquid markets — a normal market function driven by uncertainty and risk pricing.
Phase two begins when fighting starts. Markets immediately exacerbate existing fears by pre-pricing worst-case scenarios before sufficient information is available to distinguish those from more realistic outcomes. This causes a sharp spike in oil prices.
Phase three begins as markets gradually process that outcomes are likely to fall short of the worst-case scenarios — possibly approaching best-case outcomes. Oil prices begin to decline and stock markets rise. Fisher explicitly connects this to the Iranian conflict, pointing to falling oil prices and stocks hitting all-time highs as evidence that phase three is underway.
Fisher concludes with a notable historical regularity: six and twelve months after an energy-centric conflict begins, oil prices are consistently lower than they were before the conflict started, settling back into the range established during the initial tension-building period.
Key Insights
- Fisher claims there are nine identifiable energy-centric conflicts in the post-1980 environment, and that they all follow a consistent three-phase pattern in how oil prices and markets behave.
- Fisher argues that in phase one, oil prices rise as geopolitical tensions build before any fighting begins, which he describes as normal speculative behavior in liquid markets.
- Fisher contends that in phase two, markets spike oil prices by pre-pricing worst-case alternatives before they have enough information to assess what will actually happen.
- Fisher asserts that falling oil prices and stocks hitting all-time highs during the Iranian conflict are consistent with and expected in phase three, where markets begin pricing in outcomes less severe than the worst case.
- Fisher states that six and twelve months after an energy-centric conflict begins, oil prices are regularly lower than they were before the conflict started, returning to the range established during the pre-conflict tension period.
Topics
Transcript
[0:00] Since the Iranian conflict began, every week there's endless new things to think about. What I say to you now will almost certainly be out of date very soon. But I'll tell you what I think about it that I think isn't out of date and won't be out of date. There's nine energy ccentric conflicts uh that we can identify uh in the post 1980 environment. Energy ccentric wars follow [0:31] a three-phase process. The first phase is before the fighting starts. You get a little volatility around it, which is normal speculation in liquid markets. But as the tensions build that lead up to a conflict, the price of oil rises with that. That's a normal function.…
Full transcript available for MurmurCast members
Sign Up to AccessMore from Fisher Investments
This Week in Review | US Inflation, Midterm Primaries, Q2 Earnings (Aug. 14, 2026)
This Week in Review covers July's cooling CPI data (3.4% YoY), the midterm election cycle and its historically positive market implications, and broad-based Q2 earnings growth driven by more than just AI investments. The episode emphasizes staying disciplined through political uncertainty and recognizing earnings strength across multiple sectors and geographies.
Fisher Investments’ Founder, Ken Fisher, Debunks: “Who Needs Foreign?”
Ken Fisher argues that including foreign stocks in an investment portfolio provides better diversification and lower volatility than owning only U.S. stocks, despite recent U.S. market outperformance. He contends that historically, U.S. and non-U.S. stocks deliver similar long-term returns, with performance leadership alternating between regions over 10-15 year cycles.
3 Things You Need to Know This Week | US Inflation, UK GDP, RBA (August 10, 2026)
This week's episode discusses key economic indicators including US inflation, UK GDP growth, and the Reserve Bank of Australia's interest rate policy. The outlook suggests inflation fears may be overstated, with a resilient UK economy and a cautious watch on Australian rate hikes.
This Week in Review | Record Highs, US Jobs, Yen Intervention (August 7, 2026)
This week's market review highlights new S&P 500 and global stock record highs driven by easing AI concerns and lower oil prices, mixed July employment data showing payroll decline but unemployment improvement, and coordinated US-Japan yen intervention to stabilize currency markets.
Are Stocks Ignoring Iran War Risks?
Equity markets are increasingly ignoring Iran war risks as investors recognize the conflict's economic impacts remain contained. While initial geopolitical tensions caused oil price spikes and market volatility, the on-again-off-again nature of the conflict now generates muted market reactions as the global economic implications appear limited.