The Iran-Israel Conflict: A DEO-Based Perspective
The Iran-Israel conflict has dominated recent headlines. We do not claim to have any unique insight into its causes or likely outcomes. However, what we can offer is our structured approach to thinking through geopolitical crises—namely, by examining Demographics, the Economy, and the Outlook (or DEO, as we prefer to call it). You may find this helpful, or at least different from what you get from the news.
Demographics – The People Behind the Policies
When looking at geopolitical events like the Iran-Israel conflict, we always start with demographics. Why? Because societies don’t act, people do. Understanding who those people are demographically helps explain much of what follows.
Let’s begin with current Iranian demographics, courtesy of Wikipedia:
As shown in the data, Iran’s population in 2020 was approximately 85 million, with a median age of 34. So, what are 34-year-olds typically like?
We looked it up for you: in 2024, the average age of marriage in Iran was 29 for men and 25 for women. The average Iranian woman has 1.67 children. So, a typical 34-year-old in Iran likely marries young and raises at least one child in pre-school or primary school.
This demographic picture needs a time perspective. What was it in 1980, at the time of the Islamic Revolution?
According to populationpyramid.net, the population of Iran in 1980 was slightly less than 40 million with a median age of 18 years. What do, on average, 18-year-olds do? Well, in this case, they started a revolution—unsurprisingly, we might add. The two graphs suggest that the current Iranian society is substantially different from the society of Iran in 1980. However, that change is lost in the present political narrative.
Another interesting fact about Iran today: women in Iran do not work. The Iranian workforce has only 17% women, while in Saudi Arabia, that percentage is above 35%. We really do not know how to interpret this last fact, but we find it curious. This backdrop matters when trying to understand the posture Iran brings into the Iran-Israel conflict—a maturing population, fewer children, and an economically inactive female majority.
Now, moving on to the demographics of Israel. According to Wikipedia, this is how the population pyramid looks in Israel:
The Israeli population is noticeably smaller, slightly less than 10 million people, with a median age of 29, but younger people in general outnumber older groups. The Israeli fertility rate—2.78 children per woman—explains this trend. Yes, Israeli women tend to have more children, but that number is skewed. Non-religious Israeli women tend to have 1–2 children, while Orthodox women tend to have many more. According to Israeli government data, the average is 6.6 children.
This explains why religious factors are increasingly shaping Israeli domestic politics. Given the population pyramid, that influence will likely grow in the future.
Economy – Capital Doesn’t Panic Easily
Economic performance often reveals how a country responds during prolonged tension, and in the case of the Iran-Israel conflict, we find it useful to examine which side holds the stronger economic position.
Let’s begin with Israel. Foreign Direct Investments in Israel, courtesy of tradingeconomics.com:
FDI in Israel in 2024 was $ 150 billion, nearly six times higher than in 2015. Israel is often portrayed as an investor’s paradise, or so it seems. However, let’s also take a look at the Israeli markets. We will use the local market, as the Israeli currency has been largely stable over the last 10 years compared to the USD.
While we were writing this article, news broke of a surprise truce between Israel and Iran. Yet despite the dramatic headlines, the Tel Aviv-125 Index tells a different story. It has doubled over the last decade and surged 48% in 2025 alone, with more than 10% of that gain occurring just in the last month. On the day after the truce, the index rose only 1%. Surprised? Cruise missiles were hitting residential areas and hospitals, and yet investors were piling into Israeli stocks like never before decade. Strange behavior, wouldn’t you say?
Now let’s look at Iran. Although many portray Iran as economically sanctioned and isolated, the Iran-Israel conflict prompts us to revisit that assumption.
Iran has a stock market, and it is not small. According to Wikipedia, as of December 2024, the total capitalization was 2 trillion USD. Yes, we were surprised as well.
Initially, we believed this was a mistake or the result of local currency controls; however, it appears that while there are deviations between official exchange rates and market exchange rates, these deviations are relatively small. Yes, Iran has a quite valuable stock market, with monthly trading volumes of around $ 40 billion USD.
We present to you Iran’s main Index – TEDPIX, courtesy of seekingalpha.com:
We note that the most recent data available is from 15 June 2025. Currently, Tehran has suspended stock trading. However, that should not stop us from making several observations. The first one is that hostilities started on 13 June 2025, so while the data is not up to date, it is not completely old either.
Anyway, it would appear that the index is up about 50% over the last year, but keep in mind inflation in 2024 was around 30%. What is interesting is that the index is down only 3% since the start of the hostilities. Isn’t that strange?
We know the data includes only the beginning of the conflict, but even then, it was apparent that this is no small skirmish.
Outlook – Markets Say “Truce Will Hold”
If markets truly digest information best, they currently signal that the Iran-Israel conflict likely won’t escalate much further. We could be wrong, and so could the markets, but for now they’re signaling calm, not chaos.
We are no experts in political or military matters. However, looking at the markets in both Iran and Israel, one would conclude that the markets think: there is no reason to panic. This does not deny that the conflict has caused unfortunate casualties; it only emphasizes that the conflict is not expected to grow much larger. The truce recently announced between Israel and Iran will, most likely, hold.
So yes, the Iran-Israel conflict continues to draw attention, but when viewed through demographics, economic indicators, and market behavior, the narrative becomes clearer, if not simpler.
Markets, as always, speak volumes, if you know how to listen.