Indian equity benchmarks, including the Sensex and Nifty, faced significant declines on Wednesday as escalating tensions in West Asia raised crude oil prices and rattled global markets. The situation has become a material global risk event, particularly with the Islamic Revolutionary Guard Corps threatening the closure of the Strait of Hormuz, a vital route for oil and LNG transport. Historical data indicates that market downturns during geopolitical conflicts have often been followed by substantial recoveries. For instance, after the Iraq War in 2003, the Nifty 50 saw a 110.2% return over two years, while midcaps and smallcaps outperformed with increases of 218.5% and 248.1%, respectively. Similarly, following the Russia-Ukraine conflict, the Nifty rose 30.5% over two years. Current tensions, however, present unique challenges due to their impact on energy supply, with 50–55% of India's crude oil and LNG imports transiting through the Strait. As markets react to immediate risks, the potential for recovery remains contingent on how long energy flows are disrupted and the speed of macroeconomic stabilization.