Oil prices surged amid the conflict involving Iran, but the market reaction suggests investors still view the spike as temporary even as geopolitical risks remain elevated.
BNN Bloomberg spoke with Martin Pelletier, senior portfolio manager at Wellington-Altus Private Counsel, about oil volatility, the return of stock dispersion and how rising energy prices could influence inflation, interest rates and investment strategy.
Key Takeaways
- Oil prices may remain volatile in the near term, with multiple geopolitical and supply factors making short-term predictions difficult for investors.
- Energy producers and futures markets have not fully followed the recent surge in spot prices, suggesting markets see the spike as potentially temporary.
- A potential commodity bull market could emerge if energy prices remain elevated and contribute to inflation or stagflation pressures.
- Stock dispersion has returned, meaning broad index returns may mask significant differences between individual companies.
- Investors may favour real assets and commodity producers such as gold and copper miners as protection against fiscal pressures and inflation risks.
Read the full transcript below:
MERELLA: Markets are watching the war in Iran as uncertainty continues about how long it will last and the intensity of the attacks on Iran and the response from that country. Let’s bring in Martin Pelletier, senior portfolio manager at Wellington-Altus Private Counsel. Thanks for joining us.
MARTIN: You betcha.
MERELLA: Oil well off that $100-plus mark — it was near $120 on the weekend. Do you see the surge being more short-lived, or do you think there could be a bounce back here?
MARTIN: Yeah, I mean that’s the big question here. I’ll give you the best answer that probably has the highest probability — there’s going to be a lot of volatility in the next week and a half. I told an interviewer last week there was about a 25 per cent chance of oil going well over $100, and it did, but it came back down again.
There are just so many moving parts here that make it very difficult to make near-term predictions, and therefore you have to be very careful about how you’re investing in this market. You can see the lack of response in oil producers and even in the forward curve a little bit here — they’re not moving with spot prices. Is that the correct action to be taking? I don’t know. But I do own some oil in my portfolio in case I’m wrong and these things move higher over the longer term.
MERELLA: Yes. Okay, so how would you treat energy stocks more generally? Are you treating oil differently from natural gas, for example?
MARTIN: Yeah, we tend to be more — I mean, depending if you’re talking about domestic gas in North America or LNG, which is a much different situation. But let’s just talk about oil for a second here.
There are just so many moving parts. If this gets prolonged and oil prices move higher and stay higher, the economic damage that’s going to be done globally is a big risk. At the same time, if this gets resolved in short order, the question is how much damage has already been done and how much global supply has been brought to market to deal with this short-term shortage.
Longer term, again, I want to have a little bit of oil in my portfolio. I think we’re in a commodity bull market. The commodity trend is upward. The big question is whether it’s going to be stagflation, which is not good for the broader economy and not good for some other segments of the market.
MERELLA: Are there, Martin, stocks that you see acting more stably right now — perhaps as a safe haven?
MARTIN: Yeah, I mean we’re seeing some dispersion in the markets, and that means there’s good opportunity for stock picking. That’s where some value can be added by a portfolio manager. Instead of just buying passive ETFs, you really want to think about defence here.
You don’t necessarily want to own government bonds — that’s essentially being short oil. What are the alternatives in that space? We’ve been using structured notes, which have been beneficial. You also want to own real assets.
If governments have to start selling assets to pay for oil and support their deficits, maybe they start selling U.S. Treasuries. That means the U.S. government may have to find ways to support its debt issuance, potentially even printing money, which could be supportive for gold and maybe even copper.
So we own gold producer Agnico Eagle. AEM is a good position for us, and BHP on the copper side. Tactically, in other areas — Microsoft has been selling off, so we reduced our Google position and rotated to Microsoft, and we’ve been picking away at Honeywell, for example. So there are some good stock-picking ideas in this highly tumultuous world we’re in.
MERELLA: With the Iranian conflict, I’m wondering if you’re seeing any threat yet to the data centre buildout. I know data centres have been targeted by Iran and some have been hit. Do you see any fallout from that, or is it too early to know?
MARTIN: It’s too early. I think there are too many projects in the queue, and not all of them will get built anyway. It’s really a matter of whether the oil price we’re seeing on the front end moves across the curve into the forward market.
We are in steep backwardation. Does that feed into longer-term pricing? Going back to my stagflation trade — if energy prices stay much higher, a lot of these projects will be challenged to continue.
However, there are so many projects already planned that it may just take out the ones that were marginal anyway. Those that have secured long-term resources — like copper and other metals — should be able to proceed because they’ve hedged some of their costs.
MERELLA: Okay, so talk to me a little more broadly about technology. We know the trade moved out of some of the Magnificent Seven and into more cyclical stocks over the past six months. What have you noticed lately ahead of the conflict with Iran?
MARTIN: Yeah, again this is a duration trade unwinding. When I talk about duration, it’s not just fixed income — it’s also companies that are sensitive to interest rates.
Some of these tech companies are spending enormous amounts of money — potentially even trillions if you believe what’s being projected. They’re going to depend on public markets to raise capital and will likely deplete cash positions.
If interest rates rise to fight higher energy prices and inflation — or even stay where they are — some of these projects won’t get built. The growth assumptions that have been built into valuations may not materialize.
Markets are forward-looking, and over the past six months they’ve been unwinding some of those assumptions. The big question is how sustainable that trend is. If this conflict drags on and commodities continue rising — particularly energy and precious metals — it could put more pressure on rates and lead to further selling in technology.
But if the situation is resolved quickly, it could create a buying opportunity. That’s why we still have some weighting in the sector, including Microsoft and Google.
MERELLA: Got it. All right, Martin, we’ll leave it there. Thanks for your time. Martin Pelletier, senior portfolio manager at Wellington-Altus Private Counsel.
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This BNN Bloomberg summary and transcript of the March 10, 2026 interview with Martin Pelletier are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
