* Middle East war sparks energy market volatility similar

to 2022

* Stocks fall in echoes of 2022

* Safe havens react differently; gold falls, Bund yields

rise

By Sophie Kiderlin, Niket Nishant and Samuel Indyk

LONDON, March 13 (Reuters) - World markets, rocked by a

Middle East war that could trigger another inflationary shock,

are looking back at the play book from Russia's invasion of

Ukraine in 2022 for clues on what's next.

Back then, with the global economy emerging from the COVID-19

pandemic, surging energy prices magnified already rising

inflation, equities fell, and investors sought safety in the

dollar.

"There are some parallels, in the sense that the global economy

is weak now because of the trade war," said George Lagarias,

chief economist at wealth manager Forvis Mazars.

"There is an underlying inflationary force, which is the

trade war, that could be exacerbated by a hike in oil prices."

CRUDE SHOCKWAVE

There are some similarities in the way markets are reacting to

the Middle East war to the early days of the Russia-Ukraine

conflict in February 2022.

Energy market volatility has rivalled the turmoil seen after

Russia invaded Ukraine, with Brent crude oil soaring

around 40% since the U.S.-Israel strikes two weeks ago and

nearing $120 on Monday.

In 2022, Brent settled around 15% higher at the two-week mark,

having hit its highest since 2008.

The oil market has "moved from an essentially frictionless

supply-side world for the decade or two before the pandemic, to

what is now a world that is being consistently hit by one supply

shock after another", said William Blair's macro analyst Richard

de Chazal.

The dollar has also risen 2.6% since the Middle East war

began, matching its gain in 2022 over the same number of days.

SAFE HAVEN SHAKE-UP

But other assets have behaved entirely differently.

European wholesale gas prices have seen a near 58%

rise this time around, a relatively muted reaction compared to

2022's nearly four-fold jump, reflecting Russia's role as a

major gas supplier.

Among safe havens, Germany's 10-year Bund yield has

jumped 30 basis points since the Iran war began, versus a more

than 10 bps fall four years ago.

Markets have been quicker to price in expectations of rising

inflation this time - in 2022, yields rose sharply after their

initial fall as pricing pressures became clearer.

Those fears seem more muted this time around, and the euro

zone's five-year forward inflation swap, which

spiked sharply in 2022, remains well-anchored at around 2.18%,

near the ECB's 2% target.

But underlying inflationary impulses are similar to four years

ago, when post-pandemic price pressures forced aggressive global

rate hikes. Forvis Mazars's Lagarias downplayed the likelihood

of similar moves near-term.

"They'll (central banks) need to see real inflationary pressures

for two to three months in the core numbers," he said.

"That is unlikely to happen, and if it does, it's probably

not because of Iran."

Elsewhere gold, which spiked almost 8% when Russia

invaded Ukraine, has fallen some 3% since the Iran war erupted.

RBC strategist Christopher Louney said the clear line from

the crisis to energy markets meant there was less "immediate

need for a general-purpose hedge", contributing to gold's

weakness alongside higher bond yields and the dollar.

EUROPEAN SHARES PLAY COPY CAT

Four years ago, European stocks faced a sharp selloff, dropping

about 10% within the first two weeks of war. This time, they are

down 5%.

In 2022, Europe was in the eye of the storm geographically

and because of its energy dependency on Russia. While the Middle

East is further away, Europe's dependency on energy imports

still makes it vulnerable.

Barclays equity strategists said Europe's STOXX 600 index could

go towards 550 points if oil stays near $100, a roughly 13% fall

from its closing level on February 27.

One difference is European market conditions preceding the

conflicts.

While shares were at record levels before this crisis thanks

to a diversification away from U.S. assets and European

stimulus, equities had already retreated in 2022 anticipation of

Russian invading Ukraine.

BAD ENERGY

The CBOE oil volatility index has reached a five-year

high of 120%, surpassing a peak of 102 hit after Russia invaded

Ukraine in 2022.

But beyond energy, volatility is nowhere near what is generally

considered crisis territory. At roughly 25, the VIX index

of equity volatility is running warm, but below April 2025's

highs of 60 and below the COVID highs of 80.

In February 2022, it touched a high of 38, before

retreating.

The ICE BofA MOVE index of bond volatility has risen

to 95, its highest since June 2025, still below a high of 140 in

early March 2022. FX volatility has barely budged.