Markets’ relief rally based on the US-Iran two-week ceasefire is understandable but misplaced, warns the CEO of one of the world’s largest independent financial advisory organisations.
The warning from deVere Group’s Nigel Green comes as global markets surge on the announcement that US President Donald Trump has agreed a conditional two-week pause in military action with Iran, tied directly to the reopening of the Strait of Hormuz.
Brent crude has fallen around 15% in days to below $95 a barrel, reversing a sharp war-driven spike, while European equities have rallied aggressively. The Stoxx Europe 600 has climbed 3.8%, Germany’s DAX is up 4.4%, and the FTSE 100 has gained 2.5% as investors rapidly unwind geopolitical risk positions.
Nigel Green says: “A 15% collapse in oil in less than a week and a near 4% jump in European equities tells you exactly what markets are doing. They’re pricing in a clean de-escalation. But that assumption looks far too optimistic.”
The ceasefire remains conditional and time-limited, with both sides linking compliance to actions on the ground. Iran has stated it will allow two weeks of safe passage through the Strait of Hormuz, a route that carries roughly 20% of global oil flows, while the US has paused strikes during the same period.
Nigel Green says: “This is a 14-day window, not a permanent policy shift. You have a fifth of the world’s oil supply moving through a corridor that is still effectively under the influence of one of the parties to the conflict. That’s not stability.”
Complicating the picture further, there are ongoing reports of missile and drone activity involving Gulf states despite the truce, and Israel’s military operations continue in Lebanon, highlighting that the broader regional conflict remains active beyond the US-Iran framework.
Nigel Green says: “Missiles are still being launched in the Gulf, Israel is still engaged on another front, and yet markets are behaving as though the region has normalised.
“There’s a clear disconnect between price action and reality.”
There are also growing indications that Iran is exerting selective control over passage through Hormuz, with some vessels reportedly facing conditions or additional costs tied to transit, reinforcing its leverage over global energy supply chains even during the ceasefire period.
“Even if only a portion of tankers face delays, restrictions or additional costs, it feeds directly into global pricing. You don’t need a full blockade to move oil markets sharply higher again,” explains the deVere CEO.
At the same time, President Donald Trump has signalled a willingness to engage with Iran on nuclear material removal and has opened discussions around potential sanctions relief, which markets are interpreting as a pathway to a broader agreement.
Nigel Green says: “Sanctions relief and nuclear negotiations are being discussed at the same time as a temporary ceasefire. This is a complex and fragile mix.
“None of it is locked in, yet markets are already trading as if it is.”
The scale of the equity rally reflects how heavily positioned investors were for escalation.
As tensions ease even temporarily, capital has flowed quickly back into risk assets, particularly in Europe, which is highly sensitive to energy price movements.
Nigel Green says: “A near 4% move in the Stoxx 600 and more than 4% in the DAX in such a short period shows how aggressively investors are repositioning.
“But repositioning based on a two-week truce carries obvious risks.”
Energy markets remain the critical transmission channel. Any disruption to flows through Hormuz, renewed attacks on infrastructure, or breakdown of the ceasefire could rapidly reverse the drop in oil prices and reignite inflation concerns globally.
“Oil below $95 looks comfortable, but it is sitting on top of unresolved risk. A single escalation point in the Strait could send prices sharply higher again within days.
“The current rally is being driven by relief, not resolution. The rally is getting ahead of reality.”
The structural drivers of volatility across the Middle East remain in place, and the timeline for any lasting agreement remains uncertain.
Markets are celebrating a pause in hostilities, but the underlying conditions that drove oil higher and equities lower have not been removed. They have simply been deferred.
“Investors should treat this rally with caution. The upside from relief may be limited, but the downside from renewed escalation remains significant and immediate,” warns the deVere Group CEO.
