At best oil drops to $80, but that’s still a different world: deVere CEO
At best oil drops to $80, but that’s “a different world” to what we had before the US-Iran war, predicts the CEO of one of the world’s largest independent financial advisory and asset management organisations.
The stark prediction from Nigel Green of deVere Group, which has $14bn under advisement, comes as Brent crude surged beyond $120 a barrel to a new conflict era high this week following a US-led blockade of the Strait of Hormuz, a maritime corridor that carries close to 21 million barrels per day – around a fifth of global oil consumption.
Nigel Green says: “Even if oil pulls back to $80, I suspect that markets aren’t going back to the conditions seen when crude traded at $60 earlier this year.
“A structural reset has taken place, and it’s being driven by deliberate major global political strategy on several fronts, not just supply disruption.”
Prices have climbed sharply from roughly $60 in January to above $100 before the latest escalation, with the move through $120 reflecting both physical risk to supply and a surge in geopolitical premium. Shipping costs through the Gulf have jumped, with war risk insurance reportedly rising several-fold in recent weeks, while rerouting adds time and cost tal deliveries.
“Moving forward, the Strait of Hormuz can no longer be treated as a neutral passage.
“Around 20% of the world’s oil and a significant share of LNG flows pass through it. Interference at that scale forces a complete repricing of risk across energy markets.”
Donald Trump is using the blockade as leverage in its confrontation with Iran, embedding energy supply directly into geopolitical negotiations.
A temporary ceasefire announced weeks ago has done little to restore confidence in uninterrupted flows.
Nigel Green explains: “Oil is now part of the negotiating toolkit, which changes everything. Prices are no longer reacting only to events, they’re reflecting intent.
“This introduces a persistent premium which will, we expect, keep a floor under the market.
“A fall back to $80 would still leave oil roughly 30% above levels seen at the start of the year. For the global economy, that carries immediate consequences.”
The International Energy Agency estimates that every sustained $10 increase in oil prices adds around 0.2 percentage points to global inflation, feeding directly into transport, food, and manufacturing costs.
“Even an $80 oil price still feeds inflation at a level central banks can’t ignore. It tightens financial conditions, squeezes consumers, and forces policymakers to hold restrictive settings for longer than markets had expected,” notes the deVere CEO.
The growth outlook is also shifting. Higher fuel costs are already filtering through supply chains, raising input costs for industry and compressing margins. Import-dependent economies such as China, Japan, and much of Europe face a heavier burden, while US producers benefit from domestic output strength.
“Energy-importing economies are exposed in a way that becomes immediately visible in trade balances and corporate earnings. This is a material headwind.”
Global spare production capacity, largely concentrated within OPEC+, remains limited relative to potential disruption scenarios.
Nigel Green says: “There is no quick fix on the supply side. Spare capacity exists, but it is not sufficient to neutralise a prolonged disruption of this scale. That reality reinforces the higher floor for prices.”
Financial markets, which had been positioned for easing inflation and improving growth conditions, are being forced to adjust rapidly. Energy equities have outperformed, while sectors reliant on transport and logistics are under pressure.
The repricing is already happening. Energy producers, commodities, and assets with strong pricing power are gaining support. Sectors with thin margins are being tested hard.
The broader shift extends beyond oil. Strategic use of trade routes, sanctions, and supply chains is becoming more pronounced across global geopolitics, increasing the speed at which political decisions feed into market pricing.
Governments are responding by accelerating energy security strategies, including stockpiling, diversification of suppliers, and increased investment into domestic production and alternative energy sources.
Nigel Green concludes: “A drop to $80 will be presented as a stabilisation point, but it’s a fundamentally different pricing world.
“The era of assuming stable, uninterrupted energy flows has ended. Oil is now part of geopolitical leverage, and that shift is setting a higher and more persistent floor under the market.”