Iran strike a “turning point” as concerns grow over oil price shock

Yasmine Raso

Senior Journalist, Financial Newswire

24 June 2025

The latest commentary from global advisory, deVere Group, in the wake of the United States’ strikes on Iranian nuclear facilities over the weekend has warned investors to remain cautious of likely economic volatility and dramatic market repricing.

Chief executive, Nigel Green, said crude oil prices are expected to spike and inflation indicators will come under “intense scrutiny” as investors are urged to reposition their portfolios and reduce exposure to sectors most likely to be “vulnerable”.

“The US strike on Iran’s nuclear sites is a market-defining moment,” he said.

“It’s a direct hit to the assumptions that have been driving investor positioning: lower inflation, falling rates, and stable energy prices. This framework has just been broken.”

“[As analysts warn crude prices could surge to $130 per barrel], such a price shock would filter through to global inflation, which remains elevated and/or sticky in many regions. Market participants had been pricing in rate cuts from central banks including the Federal Reserve in the second half of the year. That is now in question.

“A sustained surge in oil makes rate cuts very difficult to justify. If inflation spikes back up, monetary policymakers will be forced to hold, and possibly even reconsider the easing cycle altogether. That fundamentally changes the landscape for equity sectors, currencies, and credit.”

Green encouraged investors to consider the flow-on effects of the escalating geopolitical tensions on their investments and to look to more traditional ‘safe-haven’ assets for some reprieve.

“In equities, the most immediate reaction is likely to be a rotation out of rate-sensitive and consumer-driven sectors. Travel and tourism companies, which are highly vulnerable to energy costs and geopolitical disruptions, are expected to come under pressure. Tech stocks, particularly those trading on high multiples, may also see selling as the bond market rethinks the rate outlook,” he said.

At the same time, there is likely to be “increased investor appetite for energy producers, commodity firms and companies tied to national defence. With military budgets already rising in several developed economies, firms linked to security, surveillance, aerospace and weapons manufacturing are well-positioned to benefit from a surge in demand.

“Government bond yields may fall sharply on the short end, even as long-term inflation expectations creep higher. Gold, which has already rallied this year, is likely to climb further as investors hedge geopolitical and monetary risk.”

“The dollar may rally initially, but this isn’t a clean safe-haven story. If oil drives up inflation and suppresses consumer demand, we may see slower growth in the US and renewed pressure on fiscal stability. That’s not necessarily a supportive environment for the dollar longer-term.”

Green said the firm has recommended shifting allocations toward energy, commodities, and defensive names, as well as gold and inflation-linked bonds as part of a wider hedging strategy.

“This is not 2019. We’re in a tighter, more fragile system now, with less room for error,” he said.

“Investors can’t afford to wait and see. They need to respond now, reposition portfolios, and focus on sectors and strategies that can withstand prolonged uncertainty. The time for passive optimism is over.

“This strike marks a turning point. The smart investors are already repositioning, those who hesitate risk being left exposed.”