Op Risk Managers Underestimated Iran Conflict Risks

Operational risk managers failed to adequately anticipate the scale of the conflict involving Iran, leaving many organizations struggling to adapt their risk frameworks to the current geopolitical environment. The gap in preparation has forced firms to play catch-up as the war triggers a cascade of operational, financial, and security challenges across global markets.

The conflict, characterized by a joint U.S.-Israeli effort against Iran and its regional allies, has shifted the risk landscape from theoretical projections to active crises. This failure in benchmarking and foresight has left businesses exposed to volatile energy markets, disrupted logistics, and heightened cybersecurity threats.

Energy Market Volatility and Supply Chain Disruptions

The most immediate operational impact has been felt in energy supply chains. Military escalation has disrupted shipping activity around the Strait of Hormuz, a critical passage responsible for approximately one-fifth of global oil shipments. This instability has forced tankers to delay transit and sparked fears of sustained supply constraints.

oil prices climbed sharply, contributing to inflation concerns for central banks and traders. While OPEC+ agreed to a modest increase in output beginning in April 2026—adding approximately 206,000 barrels per day—analysts cited by CNBC noted that this move is unlikely to materially offset disruptions if transit routes remain unstable.

Beyond energy, the conflict has created a ripple effect through global trade. Cargo ships navigating strategic routes and airlines avoiding contested airspace have faced significant operational hurdles, forcing businesses dependent on fragile supply chains to manage escalating costs and delays.

Cyber Risk and Information Security

The conflict has expanded the battlefield into the digital realm, introducing systemic cyber risks that extend far beyond the Middle East. Retaliatory cyberattacks are now viewed as a primary tool of conflict, capable of striking companies thousands of miles away from the physical combat zones.

For operational risk managers, this evolution represents a critical failure in information security planning. The interconnected nature of the global economy means that a single retaliatory strike can trigger business interruption claims across entire industries, challenging the ability of firms to model risk in a deeply integrated environment.

Insurance and Financial Stress Tests

The insurance industry is currently facing a real-world stress test as it attempts to map a risk landscape that has evolved faster than traditional models. Shipping insurance premiums have climbed, and insurers are struggling to account for the financial consequences of disrupted shipping lanes and energy spikes.

Financial institutions have also shifted into defense mode. BlackRock has warned of growth slowdowns and inflation resulting from the conflict. Investors are rapidly repositioning portfolios, with a notable rise in safe-haven demand as equity markets and energy sectors react to the instability.

Marsh is currently monitoring the situation to help clients navigate operational risks, insurance implications, and financial impacts. The focus has shifted toward mitigating people-related risks and managing the investment fallout from the regional crisis.

Geopolitical Miscalculations

The failure of risk managers to predict the current state of the war reflects broader geopolitical miscalculations. Analysis suggests that the conflict may result in a weakened Islamic Republic that has lost significant power and gravitas but remains capable of dominating a devastated Iranian society with increased ferocity.

For the business sector, this suggests that the operational risks associated with the region are not temporary spikes but may represent a long-term shift in stability. The inability to benchmark these risks prior to the outbreak of war has left the global economy vulnerable to the unpredictable nature of retaliatory actions and strategic military strikes.