Consumer, transport and industrial sectors should see a significant rally if oil prices stop rising and begin to ease, should talks between the US and Iran produce positive results, asserts the CEO of one of the world’s largest independent financial advisory organisations.
The analysis from deVere Group’s Nigel Green comes as President Donald Trump signals “productive” discussions with Iran and suggests there is a serious chance of a deal to end the conflict, a shift that has already triggered sharp moves in energy markets.
Oil has surged above $110 a barrel since the crisis escalated, driven by threats to shipping through the Strait of Hormuz and risks to energy infrastructure across the region.
A sudden pullback in crude following diplomatic signals underlines how sensitive markets are to any hint of de-escalation.
Nigel Green comments: “Oil has been the dominant macro driver of the past few weeks. It has pushed inflation expectations higher, weighed on equities, and tightened financial conditions.
“If that pressure begins to ease, the rebound in certain parts of the market could be swift and powerful.”
He continues: “Transport sectors are likely to be among the first to respond. Fuel is one of their largest input costs, so any sustained decline in oil prices immediately improves margins and outlook.
“Investors have already started to rotate back into these areas at the first sign that energy costs might stabilise.”
The implications extend well beyond transport. Rising oil prices have acted as a tax on consumption, squeezing household budgets and dampening discretionary spending.
“Consumer-facing sectors stand to benefit significantly.
“Lower energy costs leave households with more disposable income, and that feeds directly into spending. Areas linked to travel, leisure, and retail activity should respond quickly if oil retreats from current levels.”
Industrial sectors also sit at the centre of this dynamic. Energy costs feed into production, logistics and supply chains across the economy.
The deVere CEO explains: “Industrial activity is highly sensitive to input costs. Elevated oil and gas prices have been a drag on output and profitability.
“A reversal would ease that pressure and support a broader recovery in manufacturing and related sectors.”
Financial markets are already showing how tightly these relationships are linked. Recent data shows crude prices fell sharply after Trump indicated progress in talks, while sectors previously under pressure from higher energy costs began to recover.
Yet Nigel Green cautions that markets are not pricing in a resolution with certainty.
“Volatility remains extremely high because the geopolitical situation is fluid. Diplomatic progress can shift sentiment quickly, but it does not eliminate risk.
“Investors are seemingly reacting to headlines, and that creates sharp swings in both directions,” he says.
The broader macro backdrop adds another layer of complexity. Higher oil prices have pushed inflation expectations upward, forcing markets to reconsider the path of interest rates.
“As energy prices rise, central banks face greater pressure to keep policy tighter for longer,” Nigel Green notes.
“If oil begins to fall, that pressure eases. It changes the outlook for inflation, for rates, and for growth. That is why the potential impact of a pullback in oil is so significant.”
He adds that the current moment represents a clear inflection point.
“Markets are trying to determine whether this is a sustained energy shock or a temporary spike linked to geopolitical tension. If it proves temporary, the rebound in sectors that have been hit hardest could be substantial.”
At the same time, the geopolitical dimension remains critical. Trump has indicated that discussions with Iran could involve multiple conditions, including limits on nuclear activity, while also signalling openness to broader political change. Iran, meanwhile, has continued to warn of retaliation if tensions escalate.
This uncertainty is central to the market outlook.
“Everything hinges on whether de-escalation becomes reality or remains rhetoric. If there is a credible path to lower tensions, oil prices are likely to fall further, and that would act as a catalyst for a wider market recovery.”
The CEO concludes: “The past few weeks have shown how quickly rising energy costs can ripple through the global economy. The reverse is also true.
“If oil stops climbing and begins to decline, the sectors most exposed to those costs are likely to lead the next phase of the market.
“The opportunity is there, but it depends entirely on how this situation develops.”
