An expert is warning the longer the Israel-Hamas conflict continues the more pain Kiwis will face at the pump and with their KiwiSaver.
It comes after oil prices rose by around $4 a barrel, or about 5 percent on the first day of the conflict, amid fears the conflict could disrupt output from the Middle East.
Israel and Palestinian territories are not oil producers but the Middle Eastern region accounts for almost a third of global supply.
Experts are predicting if Iran's involvement in the conflict grows, a large stake of the world's global oil supply is at risk.
Frances Sweetman, a portfolio manager at Milford Asset Management, told AM on Thursday she's not expecting oil prices to drop anytime soon if the war continues.
"The oil price has settled somewhat and I think there are three scenarios we're thinking about for the oil price and unfortunately, only one of them involves it going down. So it's not great news for Kiwis at the pump," she said.
"But if negotiations work and somehow tensions can deescalate, then that's good news for a lower oil price for Kiwis. If tensions continue and the conflict carries on as we're seeing at the moment, then the likelihood is that the oil price will stay high broadly where it is because even if things don't get worse, then speculators will continue to buy on any weakness and you'll see oil prices stay high.
"If there's any escalation, it could mean sanctions on Iran or Iran embargoes on the US and now Iran is only 1.5 percent of global oil supply but it's just that ongoing risk that will push oil prices higher."
Sweetman told AM co-host Ryan Bridge any conflict isn't good news for markets as they don't like risk, so New Zealanders' KiwiSaver accounts could take a hit.
"With KiwiSaver, we're looking at longer time horizons, so it often means we've taken a little bit more risk. This kind of geopolitics as you said before doesn't help, financial markets don't like risk and that means they can be a bit more volatile," she explained.
"We're also obviously seeing a lot of geopolitical events happening and this is not the only conflict in the world. There are also ongoing tensions between the US and China, so that doesn't help already volatile financial markets that people are a little bit on edge. So you might see more ups and downs in your KiwiSaver."
Sweetman said the big winners from the Israel-Hamas conflict are energy companies in Europe and the US.
"So definitely energy companies in Europe, the US, they're seeing a benefit from this and then actually we're seeing investors fly to safety, some more safe assets. In general, safe financial assets are gold. So the gold price went up. The US dollar is seen as a safe haven currency, so the US dollar was a little stronger at the start of the week," she said.
"Then also lower risk debt instruments, what we call bonds, so the prices of those went up, the yields went down and in fact, it's that drop in bond yields or interest rates that meant that share markets were actually quite well supported."
Watch the full interview with Frances Sweetman in the video above.