Introducing the Israel-Iran Conflict Index

Israel-Iran at a Tipping Point

Doug Crescenzi

Doug Crescenzi

— 5 min read
Introducing the Israel-Iran Conflict Index

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TL;DR:

Market Snapshots

Event Breakdown

Chaos in the Middle East: Unpacking the Israel-Iran Escalation: The Israel-Iran conflict has intensified this week, capturing global attention with a series of military and diplomatic developments. This event breakdown delves into key prediction markets reflecting these tensions, offering insight into potential outcomes and their broader implications. The Israel-Iran Conflict Index, a weighted prediction market index, surged to 56.8% as of the time of this writing, up from a dip earlier this month, with notable jumps on June 12 following Israel’s attack on Iran and a recent uptick after President Trump’s ominous warning to evacuate Tehran.

Key markets show stark movements. "Israel strike on Iran on June 20?" climbed to 85%, while "Israel military action against Iran in July?" holds at 64%, signaling near-term aggression.

Ceasefire prospects remain low, with "Iran x Israel conflict ends before July?" at 34% and "Israel x Iran ceasefire by Friday?" at 8%. 

War declarations are unlikely in the immediate term, with "Will Iran declare war on Israel by Friday?" at 6% and "Will Israel declare war on Iran by Friday?" at 4%. However, longer-term risks persist, as "Will Iran declare war on Israel before July?" sits at 8%. 

The "Major cyberattack on Iran in June?" market soared to 87%, driven by recent escalations, while leadership shifts like "Khamenei out as Supreme Leader of Iran by Friday?" remain at 11%.

Nuclear dynamics add complexity. "US x Iran nuclear talks resume before July?" and "US-Iran nuclear deal before July?" linger at 39% and 19%, respectively, with "Iran agrees to end enrichment of uranium before August?" at 43%. All of that said, Iran’s missile strikes, Trump’s evacuation call, and Israel’s claim of destroying Iranian F-14s, underscores the conflict’s volatility. 

Oil markets, like "Will Iran strike Gulf oil facilities before July?" at 25%, reflect the economic stakes.

The Israel-Iran Conflict weighted index’s value lies in its ability to synthesize these markets, weighting near-term events, high-volume markets, and severe-impact scenarios. The June 12 spike aligned with Israel’s airstrikes, while the latest rise follows Trump’s warning, suggesting predictive power amid incomplete narratives. This approach offers a more accurate depiction of conflict trends, blending diverse signals into a cohesive measure.

Fund managers can hedge against oil price swings or adjust portfolios, with a 25% rise signaling energy market risks. The index’s 54.9% escalation likelihood could prompt macro funds to favor gold or safe-haven assets. Journalists gain a data-driven lens to cut through spin, spotting trends like the cyberattack surge. Policymakers can gauge escalation risks informing diplomatic or military responses.

Escalation could disrupt global oil supplies, threatening Gulf stability. An Iranian leadership change might reshape Iran’s nuclear stance. For Middle Eastern communities, sustained conflict risks economic fallout. The index’s upward trend suggests markets anticipate further tension, offering stakeholders a tool to navigate uncertainty, though interpretation demands caution given the volatile news cycle.

Related markets & forecasts:

Long-Tail Radar

The "Long-tail Radar" section this week zooms in on the prediction market "Will Tesla launch a driverless Robotaxi service in 2025?" with $32,417 in volume, offering a glimpse into Tesla’s autonomous driving ambitions. This market’s resolution hinges on a fully driverless taxi service launch by December 31, 11:59 PM ET, with no human onboard or remote control under normal operation. The following chart reveals an upward trajectory, with probability peaking recently before settling at 79% as of the time of this writing, reflecting market speculation around Tesla’s June 22 robotaxi unveiling in Austin.

Related markets with higher volume provide context. "Will Tesla launch robotaxis in California in 2025?" at $299,135 in volume shows a 21% chance, while "Will Tesla launch a driverless Robotaxi service before July?" at $362,573 in volume stands at 21%. These markets, detailed in the following chart, suggest a regional and temporal focus, with California’s regulatory landscape and the imminent Austin event driving interest. There’s been a 37% stock surge since April, underscoring investor anticipation for this week’s launch.

For fund managers, these long-tail markets offer strategic insights. The 2025 market’s early signals could guide hedging against Tesla stock volatility, adjusting if robotaxi success boosts Tesla’s market cap, potentially influencing broader tech indices. The pre-July market’s 21% probability provides a short-term trading cue.

This interplay suggests long-tail markets may foreshadow shifts in mainstream Tesla narratives. A spike could precede broader market reallocation. Forecasters and journalists can leverage this to spot emerging trends, while traders might use the volume surge—$32,417 versus $299,135 and$362,573—as an early indicator of sentiment shifts, potentially impacting stock and futures positioning by summer’s end.

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