The Iran peace deal: What to invest in when peace breaks out?

How to invest on the back of the Iran peace deal

Well, dear reader, it finally happened. After four months of watching oil tankers play dodgems in the Strait of Hormuz, the United States and Iran have shaken hands on a deal to end the 2026 war and reopen the world’s most important plumbing. Brent crude, which spiked above US$140 a barrel back in March, its highest since the Global Financial Crisis, is now slinking back toward US$86 on the back of the Iran peace deal. Peace, it turns out, is terrific for humanity and even better for a portfolio that was positioned correctly. The trouble is, most of us weren’t.

So, let’s talk about what to do now, after the Iran peace deal, because markets have the memory of a goldfish and the patience of a toddler, and the repositioning has already begun.

First, the macro: cheaper fuel, calmer central banks

Here’s the thing about this war that made it so nasty for investors, it was a textbook supply shock. Roughly a quarter of the world’s seaborne oil normally squeezes through Hormuz, and when the IRGC slammed the door, petrol in parts of Australia screamed past $2.50 a litre and diesel cleared $3. Fuel prices jumped a staggering 32.8% in the March quarter alone. That’s not a statistic; that’s a national mood.

The Reserve Bank, bless them, was cornered. They can’t reopen a shipping lane or drill for oil, their only tool is the cash rate, so they did the orthodox thing and hiked to 4.35% in May to stop inflation expectations becoming “unanchored” (central-banker for “spiralling out of control”). Trimmed mean inflation is tipped to have peaked near 3.9% in the June quarter.

And that is the whole investment thesis in one breath. If oil keeps falling, the single biggest contributor to recent inflation goes into reverse over the next three to six months. Headline inflation rolls over, the RBA’s hiking bias melts away, and the conversation shifts from “how high?” to “when do we cut?” Following the Iran peace deal, lower oil plus the prospect of rate cuts is rocket fuel for exactly the parts of the market that have spent 2026 being flogged.

The obvious trade: buy beta, sell the barrels

When rates are heading down, high-beta and rate-sensitive stocks are where the party is. Think the long-duration growth names, WiseTech (ASX:WTC) and Xero (ASX:XRO), whose valuations live and die on the discount rate. That is, if the big SaaS meltdown, triggered by a fear of AI-induced obsolescence, is reversed.

Think consumer discretionary, where a household that just stopped haemorrhaging $80 a tank suddenly has money for a JB Hi-Fi (ASX:JBH) splurge. Think the interest-rate proxies: REITs like Goodman (ASX:GMG) and the residential builders, which behave like coiled springs the moment the bond market relaxes.

And travel. Jet fuel is roughly a third of an airline’s costs, so Qantas (ASX:QAN) effectively gets a pay rise and a customer base that’s no longer too broke to fly. Flight Centre (ASX:FLT) and Webjet, sorry … Web Travel Group (ASX:WEB) should ride the same updraft.

The obvious sell? The energy patch that was your hero for four months. Woodside (ASX:WDS), Santos (ASX:STO), Beach Energy (ASX:BPT) and Karoon (ASX:KAR) were the place to hide while bombs fell. Now the war premium drains out of the oil price and, with it, their earnings tailwind. A word of caution, though, before you dump the lot: Australia is a net energy exporter, and Woodside’s LNG is priced more off Asian gas contracts than off the Brent rollercoaster. Don’t throw the baby out with the crude.

The less obvious bets (where the real money hides)

Here’s where it gets fun, because the consensus trade is already half-priced. A few quieter ideas:

Gold. It had a glorious wartime run as the world’s favourite panic room. As the geopolitical fear premium evaporates, that safe-haven bid can fade. If you’re sitting on fat gains in Northern Star (ASX:NST) or Evolution (ASX:EVN), this is a sensible moment to take some chips off the table rather than to back up the truck.

The currency angle. A peace-driven, risk-on mood and softer commodity income can push the Aussie dollar around, and that quietly reprices every offshore earner on the boards. A weaker AUD flatters the US-dollar revenues of CSL (ASX:CSL), ResMed (ASX:RMD) and the like; a stronger one does the opposite. Most retail investors never think about this lever, which is precisely why it’s worth thinking about.

Insurers and the shipping chain. War-risk marine insurance premiums went vertical during the crisis. As Hormuz reopens and the multinational mine-clearance flotilla does its work, those premiums normalise, which is good for freight, a headwind for the war-premium party in marine underwriting.

The structural stuff that won’t reverse

Now for the bit that matters in five years, not five months after the Iran peace deal. We believe some of what this war triggered is structural, not cyclical, and cheap oil won’t undo it.

Exhibit A is the electric vehicle. As petrol hit eye-watering levels, Australian EV sales went vertical, a record 14.6% of all new cars in March, up more than 90% year-on-year, with some states posting near-50% jumps in a single month. The key insight, borrowed from the Ukraine oil shock of 2022, is the ratchet effect: every fuel crisis leaves behind a permanently higher baseline of EV demand. People who switch don’t switch back when petrol gets cheap again. That’s structurally bullish for battery-materials and charging-infrastructure names over time (lithium remains oversupplied near term, so tread carefully there).

Exhibit B is energy security as a political religion. Australia closed most of its refineries and learned the hard way (with 500-plus servos running dry) what import dependence feels like. Expect government love, and contracts, to flow toward the remaining refiners and fuel infrastructure, Ampol (ASX:ALD) and Viva Energy (ASX:VEA), plus a structural boom in rooftop solar and home batteries as households build their own energy moats. We may also see improving momentum for uranium plays longer term as Australia rethinks its position on nuclear energy.

Exhibit C is defence. Wars remind governments to spend, and that spending is famously sticky. The likes of Austal (ASX:ASB), DroneShield (ASX:DRO), Boresight (ASX:BST) and Electro Optic Systems (ASX:EOS) sit in a multi-year tailwind that has nothing to do with the price of a barrel of oil.

The bottom line

Peace is the great mean-reverter: oil down, inflation down, rates down, beta up. Position for it, but don’t mistake the cyclical bounce for the main event. The EVs, the energy-security scramble and the defence build-out are the trends that will outlast the headlines, in our view.

As always, this is general commentary and a generous helping of opinion, not personal financial advice. I’m not your adviser, and your circumstances are your own, so do your homework before you do anything rash. Markets, like ceasefires, have a habit of surprising the overconfident.