Unknown / Black Swan

The ongoing conflict involving Iran and its potential to escalate into a broader regional or even global confrontation presents a significant Black Swan risk. This situation threatens critical energy supply routes, particularly the Strait of Hormuz, which is vital for global oil transportation. The disruption of this chokepoint could lead to severe economic repercussions worldwide, affecting energy prices and triggering financial instability. Additionally, the geopolitical tensions could draw in major powers, increasing the risk of a wider military conflict. The unpredictable nature of Iran's potential responses, coupled with the existing geopolitical tensions, underscores the high risk of an unforeseen and disruptive event with global consequences.