The war between Israel and Hamas is taking a terrible toll on the people of the Middle East. And while it’s understandable for investors to be nervous about this geopolitical conflict, fears that this will spill over to the global economy and stock markets may be unfounded.

Yes, oil prices have already spiked nearly 5% since Hamas launched rocket strikes into Israel and began taking hostages on Oct. 7. Israel has responded with a blockade against Palestinians in Gaza.

That’s led to a big boost in the prices of oil stocks. The Energy Select Sector SPDR ETF (NYSEARCA:XLE), which has Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) as its top holdings, is up 6% since Oct. 7.

But unless the war becomes a much wider conflict in the Middle East that pits multiple Arab nations against Israel, it’s hard to imagine energy prices surging as dramatically as they did in the 1970s when there was an oil embargo in the region.

For one, the U.S. isn’t as dependent on the Middle East for crude as it used to be. In fact, America is now the largest producer of oil globally thanks to the shale boom, according to figures from the EIA. Neighboring Canada is fourth. (Saudi Arabia, Russia and Iraq round out the top 5).

“Global oil supply is not as concentrated,” said Madison Faller, global investment strategist with J.P. Morgan Private Bank, in a report comparing oil production now to the 1970s.

“It’s possible other producers could step in to stem some of the bleeding. The U.S. has been rapidly adding supply, and given time, it could add quite a bit more,” Faller added.

So, what’s next for the broader markets and economy as the war drags on? History shows that battles involving Israel and its neighbors rarely have a long, negative impact on stocks.

According to data from Charles Schwab, market reaction to geopolitical events that included Israel going back to 1970 have been muted. The S&P 500 is relatively unchanged during the beginning of these crises.

“Long-term portfolio performance tends to be more dependent on the economic cycle than geopolitical developments. Conflicts may flare up, but tend to not make investors bearish, outside of a recessionary global economy,” said Jeffrey Kleintop, chief global investment strategist with Charles Schwab, in a report.

And stocks even tend to rise despite military events in the Middle East.

S&P 500 Climbs Even in Times of Conflict

Fisher Investments analyzed the market reactions to the Six Day War in 1967, the first Gulf War between the U.S. and Iraq in the early 1990s, the second Iraq war in 2003 and the Israel-Hezbollah war in 2006 and found that the S&P 500 enjoyed strong gains during all four of those crises. The S&P 500 rose more than 15% in 2006, for example.

“The uncertainty as a conflict approaches and erupts can hit sentiment hard, but then stocks usually weigh the total impact on global commerce, determine it will be negligible, and move on,” analysts at Fisher wrote, adding that “history shows us stocks have a high probability of overcoming regional strife quickly, including in the Middle East.”

Drilling down to a deeper sector look, energy stocks may continue to climb the longer the hostilities in the Middle East persist since that will likely keep pressure on oil prices. Defense stocks could rally too, as investors bet on more military spending across the globe. Fears of a government shutdown weren’t even enough to spook investors in companies like Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT) and Raytheon (NYSE:RTX). The iShares U.S. Aerospace & Defense ETF (BATS:ITA) is up 5% since Oct. 6.

So, while an end to the hostilities between Hamas and Israel would obviously be welcome news from a humanitarian standpoint, the sad reality is that the war probably won’t influence the major market indices all that much.

As of this writing, Paul R. La Monica did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.