Reuters/Ahmed SaadSupporters of Shi’ite cleric Moqtada al-Sadr burn a U.S. flag during a protest demanding the government prevent the entry of U.S. troops into Iraq at Al-Tahrir Square in Baghdad, September 20, 2014.

Islamic State may be a geopolitical threat, but it has not yet posed much of a danger to business. A day’s drive from the fighting, in Kurdish-run Iraq, three Western oil firms, Genel Energy, DNO and Gulf Keystone, continue to pump out crude that is piped or sent by road to Turkey.
Their combined market value plunged after IS seized the city of Mosul in June, but has recovered to $8.3 billion, down 29% from the start of the year–a hefty fall, but not so bad for firms on the front line of fanaticism.

“We’ve gone from a place that was a bit tricky in terms of security to a full-on war,” says the chief of one firm. But he is confident that the Kurdish region’s well-armed militia will protect his business. So far investors have tweaked their financial models, not run for the door. Analysts now assume a cost of capital of 15%, up from 12.5% before IS struck, he says.

That mix of instability and business-as-usual is true of the world at large. In a new book Henry Kissinger, the doyen of foreign-policy strategists, describes a world in which disorder threatens, and violence in Ukraine and the Middle East and tensions in the South China Sea vindicate him. In theory, after 20 years of global expansion, multinationals are more vulnerable than ever.

Listed Western firms have 20-30% of their sales in emerging markets, about double the level in the mid-1990s. It is not just oilmen but tech wizards and sellers of fancy handbags who face political risk. It can range from currency instability, vindictive regulation, curbs on remitting cash back home and production disturbances to sanctions or even nationalisation.

Yet none of the recent geopolitical turmoil has had much impact on firms or financial markets. There have been yelps of pain. Carlsberg, Adidas, Société Générale and others have had share-price falls or made write-offs due to Russia. Overall Russian losses by Western firms amount to $35 billion, based on announced write-offs and the value of a basket of ten companies most exposed to Russia.

But that is a drop in the multinational ocean. An index of political risk calculated by Dun & Bradstreet, an analysis firm, is at its highest level since 1994 (partly as a result of the euro-zone crisis). But the VIX index, which measures the implied volatility of America’s stockmarket, and is also known as the “fear gauge”, is near a 20-year low.

One explanation is obvious: the places suffering conflict are politically important but economically small. The Middle East, north Africa, Russia and Ukraine together produce just 7% of world economic output. They are mere “flesh wounds”, says the head of a Wall Street bank. Only 2% of the stock of foreign investment by American, Japanese and British firms is in these places.

Many bosses are more worried by American lawyers than jihadis. Multinationals’ central nervous systems–their financial operations and computer servers–are still typically based in the West, Singapore or Japan. In 1973, 1979 and 1990 the oil price transmitted unrest in the Middle East across the world, but the world’s energy mix has shifted away from oil since then, and America has lots of shale gas. Loose monetary policy has also buoyed markets.

Companies have so far proved better than expected at absorbing risk. This has little to do with the advice of political pundits and a lot to do with common sense. One boss says there is no substitute for getting directors to visit operations. “You get a sense of what is going on. It’s a lot better than sitting in a boardroom with nice charts and the latest 30-year-old analyst telling you what is happening in Africa.”