In the media, WAM Income Maximiser, WAM Leaders

Oil up, market down: here we go again

Published July 10, 2026

Chanticleer

With oil back in the driver’s seat and Donald Trump talking tough, investors are bracing for a rerun of March’s geopolitical market chaos.

One of the most memorable chats we’ve had with an investor this year was with Matthew Haupt, who runs Geoff Wilson’s large-cap fund.

The fund, ASX-listed WAM Leaders, really turns its portfolio over. They take Wilson’s half-research-driven-investing, half-trading philosophy to the next level, unafraid to move their $2 billion-odd portfolio of large-capitalisation stocks around.

In early March, when bombs were flying in the Middle East and Australian farmers and industrial companies were scrambling for fuel, Haupt’s description of the market was bang-on; it was an oil up/equities down story.

“We had a saying internally: it was oil driving the bus and everyone else was following as a passenger,” he said.

Fast forward four months, and we’re either back there or threatening to be.

Oil’s up, equities are down, bombs are flying, US President Donald Trump is on the world stage talking tough, the hot money is rethinking the prospect of an oil shock and what it would mean for the global growth story and inflation, while longer-term investors are trying to stay focused on the long-term artificial intelligence capex super cycle.

Who would want to be an investor in these markets?

Brokers are rewriting notes from only a couple of days ago, second-guessing the oil demand/supply situation and their price forecasts, while fully acknowledging they cannot know when or where the US-Iran flare-up will conclude. And it’s hard to have even a base case.

Citi’s commodities team told clients this morning their base case was a “swift return to dealing over the next one to two weeks, but risks surrounding delays have risen”.

“The return to negotiations is up to President Trump and the Iranian regime, with the latter potentially deferring negotiations until after the summer driving season, or even until after the midterm elections,” they said.

Although it’s wobbly and unpredictable in the near term, their point is that both sides have a lot to lose returning to full-blown conflict, which is probably why the S&P/ASX 200 is down only 0.7 per cent on Thursday morning (its fourth straight day trickling lower) while Wall Street’s S&P500 dropped 0.3 per cent overnight.

The market wants to believe we’re not in for a proper repeat of what Haupt was talking about in March, even though shares in the likes of Santos and Woodside Energy are trading higher.

Citi says a full outbreak would only lead to both sides facing the same trade-offs they’ve already made, leading to the same conclusions. What would be the point?

So, they reckon the oil price isn’t going to run away, again.

They still think Brent crude will average about $US75 a barrel this quarter, $US70 a barrel in the December quarter and will be $US65 a barrel next year. (Brent rose as much as 1.4 per cent to above $US79 a barrel overnight).

Who really knows? Citi’s team has plenty of analysis behind its call, but it’s all likely to rely on a handful of world leaders, particularly Trump, whose day-to-day words and actions are hard to predict.

Meanwhile, Australia’s equity market will get pushed up and down by what’s happening in another part of the world, perhaps even a few times a day, like Haupt was talking about at the height of March’s craziness.

The best case for Australian investors and our companies is that it really is a swift flare-up; there are hefty enough domestic issues to worry about without going back down the oil crisis rabbit hole.

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In the media, WAM Income Maximiser, WAM Leaders

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