PRS GEOPOLITICS: Insights and Happenings, April 2026.

I’m settling back into the relative warmth of the Low Country after spending some time in the coolness of Montreal. There is an intellectual crispness to that city—and to the work we’re doing with the PRS AI team—that I absolutely adore and that sharpens my mind. But returning here always brings a shift from the technical to the deeply human because my kids are here. Their presence forces a transition from abstract systems to the reality of the future we are building.

While we spend our days mapping out “intelligence” in the digital sense, I’ve found myself returning to the work of Emmanuel Mounier. A century ago, Mounier pioneered personalism—a philosophy that rejects both the “isolated individual” of radical capitalism and the “faceless mass” of the state. It is a framework that feels strikingly urgent as the conflict in Iran enters its fourth week.

In Montreal, we talk about nodes, processing, and logic. In geopolitics, we often do the same. But Mounier reminds us that a human is not a data point or a cog; they are a person: a spiritual being defined by their capacity for free, responsible action.

The Person vs. The State

When we see reports of the recent executions of activists—part of a surge that has claimed over 2,000 lives since last year—we are seeing the ultimate “depersonalization.” To the regime, these aren’t people; they are obstacles. Mounier would argue that any system treating a person’s unique existence as a threat to a collective ideology has fundamentally failed its purpose.

The Breakdown of Communion

Mounier believed we only truly flourish in “communion” with others. Today, that communion is being shattered. As of March 21, 2026, the human cost is staggering: at least 1,444 killed and over 18,500 injured by US-Israeli strikes, alongside the loss of 13 U.S. service members and 18 people in Israel. Mounier would see this as the “relational” nature of humanity being replaced by state-sanctioned violence. 

The “Sacred Fire”

A central tenet of Mounier’s thought is vocation—the unique life-purpose we must discover and live out. Mounier spoke of a “sacred fire” that rouses a person to defend the dignity of life rather than life itself. The uprisings in Iran, where citizens demand change despite tens of thousands of arrests, are that fire in its purest form. They are reclaiming their vocation as free agents, refusing to be “taken hostage” by a materialistic spirit masquerading as authority.

A New Humanism

Coming back from those AI sessions, where almost everything is structured and predictive, Mounier’s call for a “nonviolent cultural revolution” feels vital. Real liberation cannot be “programmed” or imposed from the outside; it must bubble up from the “organic culture” of the people themselves.

 The casualties on all sides of this conflict are not statistics or “data points” in a military excursion. They are unique persons. 

As the conflict between the US-Israel coalition and Iran enters its fifth week, the strategic landscape has shifted from a rapid ‘decapitation’ attempt into a grinding regional war. Operation Epic Fury, which began on February 28, has successfully targeted high-level Iranian leadership, including Supreme Leader Ali Khamenei, but has failed to trigger immediate regime change. Under Mojtaba Khamenei, Tehran has maintained resilience, intermittently striking Israeli cities and Americans Gulf assets. This week, the focus has shifted toward a potential ground phase, with 2,500 Marines arriving in the region and threats from the White House to seize the Kharg Island oil terminal to ‘take the oil’ if a deal isn’t reached.

For investors, this military escalation has translated into a tangible supply-driven inflation shock. The closure of the Strait of Hormuz has pushed Brent crude toward $120 a barrel, making energy producers—specifically North American firms—and the aerospace & defense sector the primary beneficiaries. Stocks like Lockheed Martin and Northrop Grumman are hitting record highs as global procurement cycles accelerate. Meanwhile, the threat of a widened ‘horizontal’ front involving Hezbollah in Lebanon and the Houthis in Yemen has driven a massive flight to liquidity, with over $8 trillion now sitting in US money market funds as a hedge against volatility.

Conversely, the humanitarian and economic toll is weighing heavily on consumer-dependent and energy-sensitive asset classes. Markets in Europe and Asia are struggling due to their structural reliance on Middle Eastern energy, while US cyclical and consumer-discretionary stocks are being knocked by soaring fuel costs. Traditional safe havens like gold and long-term Treasuries are also underperforming; the persistent, war-driven inflation is forcing central banks to keep interest rates high, which pressures non-yielding assets and bond prices alike. 

As we wait for a potential ground invasion this week, the market remains skewed toward ‘hard’ wartime assets and short-duration cash instruments.

For our clients in the investment sector, the transition from a short-term geopolitical spike to a multi-week regional war requires shifting from a ‘speculative’ stance to a ‘structural wartime’ footing. The primary objective right now is to hedge against a supply-driven inflation shock that traditional diversification—like long-term bonds or gold—is currently failing to protect. PRS’ prop trading is prioritizing ‘hard’ assets and North American energy producers that are insulated from the physical disruptions in the Persian Gulf, while maintaining an overweight position in the aerospace and defense sub-sectors. These firms are moving into an unprecedented replenishment cycle as the conflict expands into Lebanon and Yemen. 

Simultaneously, building a ‘fortress’ cash position in short-duration money market funds is essential: it provides a high-yield carry while ensuring you have the ‘dry powder’ necessary to capitalize on tactical sell offs in high-quality cyclicals.

Our view is one that assumes interest rates will remain higher than expected prior to the war, driven by energy costs. This means avoiding long-dated Treasuries and focusing on the USD as the premier safe-haven, given the domestic economy’s relative energy independence. We are also monitoring maritime shipping and logistics, as insurance premiums rise and routes are diverted away from the Suez Canal and the Strait of Hormuz, global freight rates will likely stay elevated, creating a niche alpha opportunity. Ultimately, the goal is to lean into the US security and energy umbrella, favoring domestic resilience over international exposure until a credible path toward a ceasefire emerges.

Given the unique and escalating nature of this 2026 conflict, the academics we deal with – and that are essential to our R&D efforts, as it were – are identifying three critical areas of research that address the intersection of modern warfare and energy security:

 1/ The Efficacy of ‘Decapitation’ in Bureaucratic Regimes: The targeted strikes on February 28 that eliminated Iran’s top leadership have reignited debates over whether killing a head of state triggers a regime’s collapse or simply a ‘rally around the flag’ effect. Researchers are analyzing how the transition to Mojtaba Khamenei illustrates the resilience of ‘bureaucratized’ authoritarian systems compared to more charismatic or tribal leadership structures. 

2/ Energy Security as the ‘New Decarbonization’: Academics are increasingly viewing this conflict as a turning point for global energy policy. Research is shifting from climate-driven transitions to security-driven electrification, exploring how the closure of the Strait of Hormuz acts as a “super-lever” that accelerates EV adoption and renewable investment to bypass volatile fossil fuel chokepoints. 

 As always, ICRG and related PRS data continue to be the gold standard of all geopolitical risk data among the scholarly and research communities. In a recent piece in Energy Economics, the authors looked at the extent to which political risk shape prices for international crude.  Using our ICRG data and an empirical analysis based on the SVAR models, it was found that OPEC’s integrated political risk contributes to 17.58% of the oil price fluctuations in the sample period, which is only lesser than that of the oil demand shocks (34.64%). Moreover, among the eight components of the political risk in OPEC, the internal conflicts contribute most to the oil price fluctuations in the sample period.
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