In this exclusive column, eToro's Lale Akoner, Global Market Strategist, eToro, explains why the recent collapse of the US-Iran ceasefire and the resulting surge in oil prices is less about a fundamental market crash, and more about a critical repricing of geopolitical risk and global inflation.
The geopolitical risk premium has officially returned to the global energy markets. Following the collapse of the US-Iran ceasefire, punctured by President Donald Trump’s declaration that the interim accord is “over”, markets experienced an immediate and visceral reaction. With Washington revoking oil export licenses, crude prices surged over 5% to a two-week high, and the ripple effects triggered a sudden global selloff in risk assets.
However, the headline shock of military posturing is only half the story. As a market strategist, the more enduring threat I am watching in mid-2026 is what this energy spike means for central bank policy, global growth, and consumer wallets.
The ceasefire had temporarily helped contain the risk premium in oil. Its collapse puts energy prices right back at the center of the market outlook. And the biggest issue for investors right now is the upcoming inflation read-through.
The Inflationary Domino Effect
Energy acts as the foundational cost for virtually every sector of the global economy. When oil prices spike, it effectively acts as a “gas tank tax” on households and a margin-crusher for corporations.
My immediate concern is that a sustained rally in crude will bleed directly into core inflation metrics. If energy prices remain elevated, central banks, which markets had hoped would finally embrace looser monetary policy this year, may be forced into a hawkish corner. This dynamic creates upward pressure on bond yields, tightens the screws on equity markets, and bolsters the US dollar as a safe haven.
We are already seeing the impact clearly across emerging markets. While oil-exporting giants like Brazil’s Petrobras and Colombia’s Ecopetrol have seen their share prices jump, oil-importing economies have taken an immediate hit to their international bonds and local currencies.
A Repricing, Not a Collapse
Despite the heightened market anxiety, it is essential to distinguish between a short-term risk repricing and a fundamental deterioration of the global economy. For now, this looks more like a repricing of risk than a fundamental change in the long-term market outlook.
What does this “repricing” look like in practice for your portfolio?
- Safe Haven Flows: We are seeing a natural rotation toward the US dollar, gold, and other defensive assets as investors seek to steady the ship against unpredictable global flashpoints.
- Sector Rotation: While traditional oil and gas equities benefit in the short term, prolonged energy volatility is simultaneously accelerating investor interest in structural alternatives, such as clean power and AI-driven infrastructure.
- Growth Recalibrations: The International Monetary Fund (IMF) recently trimmed its 2026 global growth forecast to a sluggish 3.0%, explicitly citing Middle East war risks and trade fragmentation. Markets are currently adjusting their valuations to match this slightly cooler reality.
The Strategic Takeaway
Investors cannot predict the day-to-day headlines of geopolitical conflict, but we can prepare for the resulting economic ripples. The current market environment demands a strategic balance: maintaining exposure to long-term growth drivers while actively hedging against commodity-driven inflation shocks.
Panic selling during geopolitical escalations often leads to missed opportunities. Instead, your focus should remain on resilience. The ceasefire may be over, but the structural foundations of the global market are still intact, provided you account for the new, higher price of risk.
The views expressed here are the author’s own and do not necessarily represent the views of Business Frontier.
