Brent crude oil approaches its highest point since the conflict began. Nomura: Even a "ceasefire" does not mean "normalization of energy trading."

According to CCTV International News, driven by the ongoing tensions in the Middle East, international oil prices continued to rise during the new week that began on the evening of March 29 in U.S. Eastern Time. After the New York crude oil futures price opened, it rose to the $103 per barrel level; during trading, London Brent crude oil futures broke through the $116 per barrel mark, approaching the intraday peak recorded since the outbreak of the U.S.-Iran war.

As of the time of publication, Brent crude was up 2.94% on the day, at $108.42 per barrel, while WTI crude was up 2.31%, at $101.93 per barrel.

According to reports from the Tracking the Wind Trading Desk, on March 27, in its latest research report, the Nomura Securities Japan team pointed out that the market narrative surrounding U.S.-Iran “ceasefire negotiations” is taking shape, but investors should focus on another variable: whether, and when, energy trading can be “normalized.” And the “lag” between a ceasefire and normalization will make the investment environment in 2026 harder to navigate than it was before the war.

“‘Ceasefire’ and ‘energy trading normalization’ are not synonymous.” A ceasefire can indeed ease the market’s extreme pessimism about the economy, and effectively prevent credit tightening in financial markets. However, before the path for the resumption of energy trade becomes clear, oil prices, business confidence, and the outlook for monetary policy are all unlikely to return to pre-war conditions.

The report’s conclusion is unequivocal: “In 2026, investors may have to operate under conditions that are more ‘stagflation’ than previously expected.” This means that even if the global economy is in a recovery phase, the level of inflation and interest rates will be slightly higher than the earlier assumptions, while economic growth rates and equity valuations will be relatively constrained.

The market has already begun writing a “more stagflationary” world into market pricing. Due to inflation stickiness, expectations for rate hikes among the world’s major economies are rising. At present, the market has already priced in expectations for the Bank of England to hike rates three times this year, the European Central Bank to hike twice, and the U.S. Federal Reserve to hike 0.5 times.