The ongoing war on Iran has raised concerns globally, most particularly with Iran’s civilian population, the rising costs of oil and gas, and the growing nature of the conflict to neighbouring states.
US officials assert that the attacks are necessary to prevent Iran’s development of nuclear weapons, while suggesting the likelihood of an “imminent attack.” Such reasoning is reminiscent of former US President George W. Bush’s justification for the Iraq war – claiming that the country had “weapons of mass destruction” – later proved to be false. Considering that Iran has been vocal on its “death to America” sentiment, and its desire to forward its nuclear weapon program, the potential for an attack on the US cannot be outright dismissed. However, further analysis is required to understand other pressing motivations for starting and prolonging a war that has caused such geopolitical turmoil.
Economic Effects
As of March 19, 2026, the US is estimated to have spent approximately 18 billion USD on the Iran war. Each day, the conflict will continue to cost the US military more money, with no clear end in sight.
To put this cost into perspective, 7.8 billion is the annual budget for Transportation Security Administration (TSA), which President Trump is aiming to cut by 20%.
The economic effects are particularly prevalent on the individual consumer. Globally, gas prices have surged and reached highs that haven’t been seen in years. In Canada in particular, gas prices have reached their highest in four years.
Stock Market Movements
Prior to the attack on Iran, the Financial Times reports US Defence Secretary Pete Hegseth attempted to make a “multi-million-dollar investment” in defence stocks through his broker at Morgan Stanley. BlackRock, one of the world’s largest asset managers, reportedly flagged the inquiry internally while multiple anonymous sources provided information to the Financial Times. Ultimately, no investment was made by the broker, as the fund was not yet available to Morgan Stanley. It is of note that Pentagon spokesperson, Sean Parnell, strongly denies these claims, arguing the reporting is “another baseless, dishonest smear designed to mislead the public.” However, the reporting nonetheless raises concerns when paired with similar accusations.
Minutes before President Donald Trump announced a delay in his threatened attacks on Iran’s energy supply on Truth Social, markets saw a surge in oil futures trading. 1.5 billion USD in S&P 500 (ES) futures was bought while 192 million USD in oil (CL) futures were sold. This trade included 6 million barrels of Brent and West Texas Intermediate. Market-trackers raised flags as this trade was four to six times larger than anything else in the market at that time, a notably quiet session. The trade was made at 6:49AM EST, while Trump’s post followed at 7:05AM. Reuters reports that Brent crude saw a 15% drop following Trump’s post. By selling such a large amount of oil futures, the trade would benefit from a drop in oil prices.
Prediction Market Movements
Similarly concerning movements were made on prediction markets, where individuals place bets on events they deem likely to happen. Anonymous accounts have made from hundreds to close to one million dollars from predictions on the war.
On Polymarket, a prediction platform, over 150 anonymous accounts were created the day before the US’s first attack on Iran. These accounts all placed bets on a US strike on Iran the following day. Similar instances have occurred with other notable events from the war. In the hours and minutes before Trump announced a ceasefire with Iran on April 7, 2026, many new accounts were created and placed significantly large bets on the potential for a ceasefire. One account, in particular, cashed out with 200 thousand USD.
It is noteworthy that one of Polymarket’s investors include a venture capital firm owned by Donald Trump Jr, who serves as an advisor for the platform. President Trump’s family company, the Trump Organization, is said to be opening its own prediction market – Truth Predict.
Alternative Explanations
Despite these worrying trades and prediction bets, there remain alternative explanations for these movements in their respective markets. Given the fast-changing conditions of the Iran war, it is likely for large traders to attempt to reduce risk by locking in oil prices in case of future market volatility. Since the first US attack and the changing status of the ceasefire, oil prices have been fluctuating. It is logical for large traders to make movements as part of larger strategies that may not be apparent at first glance.
In addition to fast-moving military conditions, news media quickly shifts narratives due to frequent social media posts from President Trump. It is possible that prediction market users are placing bets simply from analyzing the positioning of the US administration.
Whether the movements should be deemed suspicious and who they can be traced back to remains a task for US regulatory bodies, if pursued. Regardless, it remains clear that Trump’s posts and the subsequent actions of the US military have strong influence on current market conditions.
Trump’s post on a ceasefire deal had a significantly positive impact on market conditions, prior to any publishing of an official ceasefire document and confirmation from Iran. The latest “economic standoff” on the Strait of Hormuz has raised prices yet again, with a direct impact on Iran, the US, and other countries globally. The continuous fluctuation of the market will persist as it reacts to conflicting reports from the White House.
Impact on Allied Security
The volatility of the markets, paired with large trades and high-yielding prediction market bets, raises concerns for allied economies. Among the alliance, economies have been negatively impacted by the Iran War. Most individuals see this negative impact through rising oil costs and limited food supply. What is less apparent at first glance, however, is the impact on allied security.
Stock market trading and prediction market bets that are placed on foreign policy issues using restricted and confidential information raise concerns for the wider monetization of intelligence. For NATO, shared intelligence among the alliance is a key component of cooperation, burden-sharing, and its wider defence strategy. With the growth of prediction markets and stories of large financial gain, the unintended promotion of using classified intelligence for personal benefit raises a security threat within the Alliance.
Outside of the Alliance, hostile actors may be able to use prediction markets to ‘change the odds’ and push public opinion. For example, by placing large bets to push probabilities toward a specific direction, hostile actors can alter media narratives and public perception, ultimately shifting economic behaviour and impacting foreign policy.
These identified threats, and the potential for more, should thus raise significant concern. The unregulated growth of prediction markets, in particular, is an issue that NATO countries may need to address.
The Future
In a briefing published by the White House on February 24, 2026, the administration argued Trump has ended wars and boosted alliances, while improving gas prices to reach multi-year lows. February 28, 2026 is when the US and Israel first launched its attack on Iran, contradicting this press release in a matter of days.
When the Strait of Hormuz will permanently be re-opened, and further when the war in Iran will end, remain questions beyond the scope of most. Until then, the markets will continue to experience volatility, and consumers will continue to see high prices at the gas pump, with big and small traders reaping the benefits from predictive trading.
Nobel Prize-winning economist Paul Krugman, who raised concerns about the market trades, posed the uncomfortable question, “Are decisions about war and peace in part serving the cause of market manipulation rather than the national interest?”
With the Trump administration, it may never be clear.
Photo: Stock market changes (2016) by James Smith via Wikimedia Commons. Licensed under CC Zero.
Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada.
