Since the American and Israeli strikes against Iran in late February 2026, the Middle East has entered a phase of open conflict that is upending the global energy balance. The Strait of Hormuz, through which one-fifth of the world’s oil transits, is partially blocked. Brent crude has surged from $72 in January to over $98 in mid-April, a level markets hadn’t seen since 2022. For holders of significant wealth, on the Cote d’Azur and beyond, this new energy shock demands a thorough review of investment strategies.

An oil shock of unprecedented scale since 2020

The International Energy Agency (IEA) describes the current situation as the « most significant disruption in the recent history of the global oil market. » The damage inflicted on Iranian oil infrastructure and retaliatory actions on Persian Gulf shipping routes have caused a sharp contraction in global supply.

Brent crude stands at $98.36 on 16 April, up 3.6% in a single day. US WTI follows at $93.41. For the first time since 2020, global oil consumption is expected to decline in 2026, not due to lack of demand, but due to insufficient supply.

Peace negotiations between Washington and Tehran fuel cautious hope, but operators remain sceptical. Fatih Birol, IEA Executive Director, warned that April « should be even worse than March » for the energy sector.

The ECB’s dilemma: raise rates or support growth?

The next ECB Governing Council meeting, scheduled for 30 April 2026, promises to be decisive. Key rates have been unchanged since June 2025: main refinancing rate at 2.15%, deposit rate at 2.00%, marginal lending rate at 2.40%.

But the context has radically changed. Eurozone inflation has climbed to 2.6% in March, well above the 2% target. The ECB has revised its 2026 inflation forecasts upward, now at 2.6% on an annual average basis, compared with 2.1% anticipated before the conflict.

Joachim Nagel, Bundesbank President, told Reuters that a rate hike in April is « an option. » Christine Lagarde has reaffirmed that the central bank « will do whatever is necessary » to contain inflation. Markets now anticipate two to three rate hikes by year-end 2026, taking the key rate to 2.50% or even 2.75%.

Implications for borrowers and investors

Mortgage rates in France, already back up to 3.27% on average over 20 years in April, could breach 3.50% if the ECB acts. The 10-year OAT, the benchmark for bank pricing, has risen from 3.2% to 3.8% in one month. Banks are still absorbing part of the shock, but their margins are shrinking.

The spectre of stagflation in Europe

The IMF has lowered its growth forecast for the eurozone to 0.9% in 2026 (down from 1.3% projected in January), while revising inflation upward. This toxic combination — low growth and high inflation — bears a name economists dread: stagflation.

The OECD shares this concern and calls on central banks to « remain vigilant. » BNP Paribas Economic Research notes that « the shock waves from the conflict are amplifying » and Europe, as a net energy importer, is particularly exposed.

The German government has already lowered its growth forecasts and raised its inflation outlook. Rebuilding European energy stockpiles for winter 2026-2027 poses a major challenge if the Strait of Hormuz remains disrupted.

Impact on major asset classes

Equities: heightened volatility

European stock markets are moving in mixed fashion. After three weeks of gains fuelled by ceasefire hopes, investors remain cautious. The most exposed sectors are transport, industrials, and consumer goods. Conversely, energy and defence stocks are outperforming.

Bonds: the return of rate risk

Rising bond yields penalise existing bond portfolios. Euro-denominated life insurance funds, predominantly backed by bonds, are however benefiting from the gradual renewal of their portfolios at higher rates. The average euro fund return in 2025 stood at 2.65%, and is expected to remain between 2.4% and 2.8% in 2026.

Real estate: a market under pressure

Rising mortgage rates are slowing the real estate recovery. The best profiles still obtain 3.00% over 20 years, but the average stands at 3.27%. An ECB rate hike in April could further freeze the transaction market. European REITs (SCPIs) nevertheless remain attractive with an average yield of 4.72%, creating a positive spread over borrowing costs.

Gold and commodities: safe havens activated

Gold, the quintessential safe haven, is fully benefiting from geopolitical uncertainty. Energy commodities (oil, gas) are surging, which benefits already-positioned investors but raises costs for the real economy.

Five strategies to protect significant wealth

1. Strengthen geographic diversification

The eurozone is the weak link in the current crisis. Increased exposure to American, Asian markets, or economies less dependent on Middle Eastern oil (Canada, Norway, Brazil) helps dilute European-specific risk. For Cote d’Azur expatriates, Luxembourg life insurance offers an ideal framework for this international diversification.

2. Integrate real assets and inflation hedges

Inflation-linked bonds (OATi, TIPS), indexed-rent real estate, and commodities provide natural protection against purchasing power erosion. In a stagflationary environment, these assets historically outperform conventional bonds.

3. Capitalise on high euro fund rates

The euro fund within life insurance remains one of the few investments benefiting from rising rates without suffering the downsides. With average returns of 2.65% (and up to 4.50% with boosted offers), it constitutes a secure foundation when the Livret A savings account yields only 1.50%.

4. Review the bond allocation in your portfolio

Favour short-duration bonds (1-3 years) which are less sensitive to rate hikes. Target-date funds maturing in 2028-2029, denominated in investment-grade euros, offer attractive embedded yields (3.5% to 4.5%) with capital visibility at maturity.

5. Maintain a tactical liquidity pocket

In uncertain times, liquidity is a strategic option. It allows you to seize opportunities that will inevitably emerge — whether an entry point into equity markets after a correction, or a discounted real estate acquisition. Term deposits at 6-12 months currently offer yields close to 3%, with no capital risk.

The 2026 Finance Act: an additional parameter

The geopolitical context overlaps with major tax changes introduced by the 2026 Finance Act. The flat tax rises to 31.4% (CSG increase on capital income from 9.2% to 10.6%). The new 20% tax on wealth-holding companies targets entities with assets exceeding 5 million euros. The CDHR (differential contribution on high incomes) is extended.

These changes reinforce the appeal of life insurance (spared from social levy increases) and European REITs (whose income escapes the 17.2% social levies). Wealth planning in an environment that is both geopolitically unstable and fiscally shifting requires bespoke professional guidance.

Outlook: what to watch in the coming weeks

Three key dates to monitor closely:

• 30 April: ECB rate decision — a hike would signal a monetary regime change
• US-Iran negotiations: any progress toward a ceasefire would send oil prices tumbling and ease market tensions
• Q1 2026 earnings: European companies will reveal the true impact of the energy shock on their margins

The Middle East crisis is a reminder of a fundamental truth in wealth management: exogenous shocks give no warning, but a well-constructed portfolio absorbs them. Diversification, liquidity, and responsiveness are your greatest assets in the current period.

The information contained in this article is provided for informational purposes only and does not constitute personalised investment advice. All investments carry risks. Riviera Wealth Management — CIF A325000 — ORIAS 11 060 879.