The stock market is fully betting on a peace fairytale, while spot premiums in the oil market conceal a hellish scenario.

汇通财经2026/04/17 09:47

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Despite both the US and Pakistan sending positive signals about the end of the conflict and the reopening of Hormuz, the situation in Iran remains the biggest risk hanging over the global markets. Stock markets are fully betting on a perfect resolution, reaching record-high levels, with both the S&P 500 and the Nikkei Index hitting new all-time highs.
The pricing logic among traders is straightforward yet fragile: should peace be achieved, the pre-war logic of strong corporate earnings supporting valuations will seamlessly return. However, spot crude oil prices remain near historical highs—even though Brent futures have fallen below $100 per barrel, they are still 33% higher than in late February.
The cognitive gap between the two major markets has reached a dangerous width. The stock market simplifies complex geopolitics into a binary switch, ignoring the lingering impact of energy costs on both consumption and production. Meanwhile, the oil market, through its persistent near-term premium structure, continues to send warnings that supply disruptions are unresolved.
If diplomatic efforts fail to achieve substantial navigation through the Strait, elevated energy prices will eliminate any room for central banks to cut interest rates, forcing rates to remain at restrictive highs. In that case, companies will not only suffer from cost pressures but also from a double blow to valuations due to higher discount rates. The current optimistic pricing in equities hardly includes any tail-risk compensation for a breakdown in negotiations.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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The stock market is fully betting on a peace fairytale, while spot premiums in the oil market conceal a hellish scenario.

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