This past weekend, the United States and Israel launched coordinated strikes on Iranian political and military targets, resulting in the death of Supreme Leader Ayatollah Ali Khamenei along with several senior Iranian officials. In response, Tehran retaliated with missile strikes against U.S. and Israeli targets across the region.

Predictably, these military actions had an immediate impact on global markets, particularly oil prices, as investors reacted to the potential for supply disruption and escalating geopolitical risk. Only time will tell what the long-term political implications of this regime change will be, or how it may ultimately influence global economic conditions.

Many investors assume that global conflicts are automatically negative for investment portfolios. But does history actually support that belief? A recent study by Morgan Stanley found that geopolitical risk events have historically not resulted in sustained market selloffs. Since 1950, beginning with the Korean War, the S&P 500 has actually shown a median gain of approximately 3% one month after significant geopolitical conflicts and about 10% over the following twelve months.

To be sure, there have been exceptions. One-year double-digit market losses have followed major geopolitical events on a handful of occasions over the past 75 years. Arguably, the most direct example was the Yom Kippur War in 1973, when the Arab oil embargo triggered soaring energy prices and helped push the US economy into recession.

This current conflict, particularly if prolonged, has the ability to create energy shortages similar to those experienced in the 1970s. On Monday alone, oil prices jumped roughly 7% as markets reacted to uncertainty in the region and concerns surrounding the Strait of Hormuz, one of the world’s most critical energy chokepoints.

At the same time, I would argue that greater Western influence in the region could reshape global energy flows over the longer term, potentially shifting geopolitical leverage in ways that could benefit the US by reducing the supply of oil to other importers like China.

Ultimately, it is too early to know what the long-term fallout of this latest Middle East conflict will be. Yet Monday’s market action offered an interesting reminder: despite the S&P 500 falling as much as 1.5% intraday, it ultimately closed slightly higher, another example of how markets often digest uncertainty faster than headlines might suggest.

As Warren Buffett once said, “Uncertainty is actually the friend of the buyer of long-term values.” For long-term investors, periods like this can serve as a reminder that volatility is often the price paid for opportunity.

(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)