Global financial markets surged Wednesday after the United States and Iran agreed to a two-week ceasefire, but a leading financial analyst is warning investors that structurally elevated oil prices are here to stay.
The US and Iran reached a two-week ceasefire agreement late Tuesday, expected to halt the American-Israeli military campaign in exchange for Tehran reopening the Strait of Hormuz. President Donald Trump announced the deal on social media hours after Pakistan intervened as a mediator.
Oil markets reacted sharply, with West Texas Intermediate tumbling as much as 19% after Trump agreed to suspend bombing Iran. Global benchmark Brent crude slid as much as 16% to $91.70 a barrel. Japan’s Nikkei 225 rose 4.8%, South Korea’s Kospi gained 5.6%, and futures for the S&P 500 advanced 2.3%, while Dow futures rose 2%.
Nigel Green, chief executive of deVere Group, one of the world’s largest independent financial advisory organisations, described the market move as a powerful but fragile rebound. “Markets have been primed for this moment. Positioning had become defensive, volatility was elevated, and energy prices were reflecting worst-case assumptions. A pause, even a temporary one, releases that pressure very quickly,” he said.
Green cautioned that the relief rally does not resolve the underlying energy problem. US crude remains up more than 70% since the year began, even after Tuesday night’s sharp drop, reflecting supply risks that extend well beyond the current conflict. The deVere chief executive noted that a two-week pause does not rebuild inventories or solve the deeper fragmentation in global energy logistics.
On sector opportunities, Green pointed to technology stocks and consumer discretionary names as likely near-term beneficiaries, arguing that lower energy prices reduce inflation expectations at the margin and support valuations. Airlines, travel, and retail were also identified as immediate winners from cheaper fuel and improved sentiment.
He was more cautious on energy equities, noting that while crude prices have pulled back sharply, the structural supply backdrop remains tight. “A two-week pause does not rebuild inventories or solve geopolitical fragmentation,” he said.
The worry in markets remains that a prolonged disruption would keep oil prices elevated and send a painful wave of inflation through the global economy. The average price for a gallon of regular gasoline in the United States has risen to $4.14, up from below $3 in the days before the war began in late February.
Green warned that market focus will quickly shift from celebrating the ceasefire to scrutinising its durability. “Investors have seen this timeline before. A short-term pause creates relief, but it also introduces a countdown.” He added that failure to convert the pause into a lasting framework would reverse sentiment rapidly, with oil prices and volatility both snapping back.
“This is a powerful rebound driven by the removal of immediate fear,” he concluded. “Yet the underlying issues remain unresolved. Investors should participate in the upside, while recognising that the next phase depends entirely on whether diplomacy can deliver substance beyond a temporary halt.”
Peace talks between the US and Iran are expected to begin in Islamabad on Friday, with Vice President JD Vance likely to lead the American delegation.
