Goldman Sachs reported strong revenue for the quarter while senior executives told clients that business has largely continued even as the Iran war leaves lasting damage. Lloyd Blankfein, Goldman Sachs senior chairman and former CEO, warned in late March 2026 that "there's so much damage to the infrastructure that the stress is going to last longer anyway," and urged clients to keep contingency plans and hedges in place. Goldman Sachs' economics team said the global economy was holding up, while Anthony Gutman, co-chief executive of Goldman Sachs International, reported brisk activity during a mid-April visit to Dubai and Abu Dhabi. Banks have kept resilience plans active and told regional staff to work remotely or follow local guidance.

Goldman Sachs is trying to thread a narrow needle. The firm is telling clients and reporters that deal-making and market activity haven't collapsed, even as senior leaders warn the economic fallout from the war involving Iran will outlast the fighting.

Business runs, but the warning is loud

The read from the top is blunt. Lloyd Blankfein, Goldman Sachs senior chairman and former CEO, told audiences in late March 2026 that the conflict's effects "is going to last" and that even an immediate cessation of hostilities wouldn't erase damage. "There's so much damage to the infrastructure that the stress is going to last longer anyway," he said, urging clients to avoid conviction trades and to "be very fleet of foot and very protective" of positions. Blankfein also highlighted valuation risk in private-market funds, warning that elongated gaps between market reckonings could worsen outcomes.

That caution sits alongside a countervailing picture offered by the firm's economics and banking teams. Goldman Sachs chief economist Jan Hatzius framed the global economy in a client note as "bending, not breaking" as the conflict approached its fourth month. Hatzius credited three factors for why disruptions, including a near-closure of the Strait of Hormuz, had not derailed growth. First, he cited unusually high prewar oil inventories. Second, he pointed to localized demand destruction for specific refined products. Third, he noted offsetting support from an ongoing artificial intelligence-driven earnings cycle and fiscal stimulus.

Hatzius's team adjusted the bank's outlook, raising the 12-month recession risk relative to the prewar baseline, while saying the short-term U.S. recession probability in their models fell from about 30% to 25%. That's a guarded data point. It signals rising risk, but not an immediate macro collapse.

Deal flow, operations and the on-the-ground read

On the ground in the Gulf, Anthony Gutman, co-chief executive of Goldman Sachs International, reported renewed appetite to do business. After visiting Dubai and Abu Dhabi in mid-April 2026, Gutman said he saw "intensity and desire" among clients and sovereign institutions to resume activity.

He pointed to full restaurants and heavy traffic in the UAE as visible signs that people were returning to routine, and told reporters that investment banking deal-making at Goldman remained robust.

Mastheads

Goldman said the firm posted roughly $17 billion in revenue for the quarter and that its advisory backlog was close to record levels. That revenue figure underpins the bank's public message. It allows Goldman to argue that capital markets and M&A remain serviceable even while risks have increased.

The rest of the banking industry adopted precautionary measures. JPMorgan and Citigroup directed some Middle East staff to work remotely while saying operations were not expected to be disrupted. Goldman advised its regional workforce to work from home and to follow local official guidance, and it increased safety measures and client communications as events unfolded. Several international banks also restricted travel and reviewed evacuation plans for staff in the Gulf.

Those operational moves reflect the posture most firms have taken: keep client service intact while running contingency and resilience plans. The firms aren't signaling a withdrawal from the region. They're signaling a higher tolerance for protective protocols and contingency spending to ensure continuity.

Two background points were consistent across the sources. First, the war has produced pronounced swings in energy markets.

Second, the conflict has begun to show up in first-quarter corporate results, via higher energy costs, supply-chain strains, and reduced Middle East demand for certain luxury and travel sectors. Those trends are the measurable channels by which the conflict has begun to affect corporate earnings and valuation.

Goldman's public posture matters because the bank is a major adviser and capital provider in global markets. Its messaging helps shape client behaviour and deal flow in a region that saw missile and drone strikes and temporary disruptions to shipping through the Strait of Hormuz. That means Blankfein's caution and Hatzius's calibrated probabilities will carry weight in investor and corporate planning.

My read is that the firm is establishing a cautious equilibrium. The bank is urging protection, while signalling that it can still execute big deals.

For clients, that combination is practical. It says plan for a longer tail of disruption, but keep access to capital intact.

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Blankfein urged clients to keep contingency plans and hedges in place.

This article was created with AI assistance.