Global financial markets are already positioning for a de-escalation of the Iran conflict despite no ceasefire or diplomatic breakthrough, leaving investors exposed to a sharp reversal if the situation deteriorates, according to a leading international financial advisory firm.
Nigel Green, Chief Executive Officer of deVere Group, issued the warning on Tuesday as oil prices retreated sharply from their recent highs, falling toward $80 a barrel in post-settlement trading after US President Donald Trump signalled the war could be ending soon, saying the operation was “very complete, pretty much” in a phone interview with CBS News.
The swing was dramatic. Brent crude had earlier surged past $119 a barrel, the highest level since Russia’s invasion of Ukraine in 2022, before pulling back sharply on Trump’s remarks.
“Markets are beginning to trade the end of the conflict before it has actually happened,” Green said. “Oil dropping back below $90 and equities pushing higher tells us investors are already pricing a scenario in which tensions cool and supply disruptions remain limited. Financial markets are extremely forward-looking but, in situations like this, they can move ahead of geopolitical reality.”
The rally in equities and the retreat in oil came despite no change on the battlefield. Iran’s Foreign Ministry spokesman warned that oil tankers in the region “must be very careful” as long as the security situation remains unstable, while Gulf Arab states have been cutting production because crude is piling up with nowhere to go due to the effective closure of the Strait of Hormuz.
Green cautioned that markets may also be underestimating the significance of Iran’s leadership transition. Following the assassination of Supreme Leader Ali Khamenei at the start of the conflict, Iran’s Assembly of Experts elected Mojtaba Khamenei as the new Supreme Leader last weekend. Green said the new leader’s strategic approach and appetite for a prolonged war remain largely unknown to global investors.
“Leadership transitions inside the Iranian system can reshape strategic thinking, military priorities, and diplomatic positioning,” he said. “The global investment community has limited experience of how the new Iranian leadership will respond moving forward.”
The Strait of Hormuz, through which approximately 20 per cent of the world’s oil consumption transits, remains the central risk to energy markets. Any sustained disruption to shipping through the waterway would force a rapid repricing of crude and fuel costs worldwide.
For Africa, which imports most of its refined petroleum products, the consequences of sustained high prices are particularly acute. Analysts note that the combination of rising oil costs and weakening local currencies, as investors move to safe-haven assets, amplifies the impact of price spikes in import-dependent markets such as Kenya and Ghana.
Green concluded that while current price action suggests investors believe the worst escalation risks have passed, any shift in events on the ground would force markets to reassess those assumptions very quickly.
“The reality is that markets often move first and verify later,” he said.
