Every week seems to follow the same pattern. President Trump pauses strikes on Iran, hints that a breakthrough on Hormuz is imminent, oil prices fall, and risk assets rally. A few days later, tensions flare again, energy concerns return, and markets are reminded that the Strait of Hormuz remains one of the world’s key geopolitical fault lines. It is becoming increasingly difficult not to think of Groundhog Day.
Yet, the more remarkable story of 2026 is not the repetition of geopolitical drama. It is the degree to which the global economy has continued to absorb it.
Back in late 2025 and early 2026, many – including us – expected a far rockier ride. US tariff hikes were supposed to deal a substantial blow to global trade. The near-closure of Hormuz threatened a renewed energy crisis. Long-term bond yields moved higher, uncertainty surged, and fears of a broad growth slowdown mounted. Instead, what we have seen, so far, is another demonstration of economic resilience.
The Eurozone is a case in point. Recent GDP data surprised to the upside despite tariffs, volatile energy markets, and tighter financial conditions. Consumers continue to benefit from strong labour markets and sizeable wealth buffers, while investment has held up far better than years of rising interest rates would have suggested. More generally, Europe’s economy has shown a surprising ability to absorb shocks since the pandemic, from the gas crisis and the war in Ukraine to tariffs and Hormuz. Which doesn’t mean the economy has been doing great of course!
The same broad story applies elsewhere. The US economy continues to demonstrate remarkable staying power, with a pickup in investment signalling technological advancement may be playing a bigger role here. China, too, has once again shown an ability to offset weakness in one area with strength in another. In particular, investment linked to manufacturing, electrification and energy-transition technologies continues to cushion the impact of its property sector malaise.
This ‘global’ resilience (emerging markets have shown considerable divergence) helps explain a paradox that has characterised markets in recent months. The US-Iran memorandum of understanding may have collapsed far sooner than expected, but markets have largely treated the renewed conflict around Hormuz as manageable. Inventories, subdued Chinese crude imports, emergency stock releases and supply rerouting have all provided temporary cushions. RaboResearch’s base case remains that the US and its partners can keep enough energy flowing through the Strait and around it, even if that increasingly requires doing so ‘the hard way’.
However, energy markets are sending a more nuanced message than headline crude prices suggest. While ceasefires and recurring rumours of diplomatic progress have reduced fears of an outright supply shock, markets for refined products look considerably tighter. Crack spreads have risen sharply, diesel inventories remain exceptionally low, Middle Eastern refining capacity has yet to recover fully, and Ukrainian attacks continue to constrain Russian refinery output. In short, the world does not run on crude oil, but on diesel, jet fuel and other refined products, where conditions remain far less comfortable.
Against this backdrop, perhaps it is not surprising that global bond yields have continued their gradual climb. Fiscal concerns matter, but so does the simple reality that economies have refused to slow as much as feared. If growth remains positive, labour markets stay tight, and energy shocks prove manageable, investors will naturally question whether global yields can push higher.
For now, resilience remains the dominant theme. But resilience is not immunity. Markets appear increasingly comfortable with the assumption that Hormuz remains sufficiently open and that energy flows continue to normalise. That confidence may prove justified. Yet if energy flows fail to recover in earnest, product shortages intensify, or higher global yields finally begin to bite into spending and investment, the second half of this story could prove a good deal messier than the first. The danger is not that we keep reliving the same day. It is that, eventually, the script changes.
Elwin de Groot is head of macro strategy at RaboResearch – Global Economics & Markets
