Earlier this week President Trump said he believes the conflict in Iran could last “four weeks,” while Chairman of the Joint Chiefs Gen. Dan Caine emphasized this was not a “single, overnight operation.” That matters for banks. A recent American Banker report outlined several potential pressure points for the industry if the conflict drags on. Here are some key takeaways from the article:
Energy Markets Move First
Roughly 20% of the world’s oil and liquefied natural gas passes through the Strait of Hormuz. Major shippers have already halted traffic there, and Dubai-based logistics company DP World suspended operations at its main Dubai port.
Nigel Green, CEO of deVere Group, warned, “Oil doesn’t need to be physically halted for prices to move sharply. Insurance costs, shipping reroutes, and precautionary stockpiling alone can tighten supply expectations.”
Higher oil prices could benefit U.S. banks active in oil and gas lending. One bank economist cautioned that the impact would be “uneven” globally. She noted that a $10 increase in oil prices could add “0.3-0.4% to inflation,” worsening existing stagflation risks.
Cyber Retaliation Risk Is Real
Between 2011 and 2013, Iranian actors launched DDoS attacks against 50 U.S. financial-services firms. Today’s threat environment is more advanced, with generative AI increasing attackers’ capabilities. If the conflict drags on, cyber preparedness may become the most immediate operational risk.
Legislative Priorities Could Stall
Another risk highlighted in the American Banker report may be in Washington. If the conflict absorbs congressional bandwidth, a bipartisan housing bill that includes community banking reforms, reciprocal deposit measures, and bank resolution updates could stall. Crypto-market-structure legislation—where banks are focused on stablecoin yield provisions—could also slip.
Timing matters. The further into 2026 lawmakers get, the harder it becomes to move complex bills.
A Long Shot—But Worth Noting
It remains “a massive ‘if,’” as Eric Grover of Intrepid Ventures said, but if sanctions were lifted under a new Iranian government, “the region would instantly become a new frontier for U.S. payments firms.”
For now, though, the base case remains limited direct exposure—but potentially widening indirect effects. If the conflict extends toward the “four weeks” the administration anticipates, markets, cybersecurity, inflation expectations, and legislative timelines all move even higher on the watch list for banks.
For more, read our recent article “Proactive Moves for All Banks Touched by Geopolitical Risk.”
