With Indian markets yet to open and investors worldwide scrambling to assess the fallout, Freris — a veteran Asia-focused economist and CEO of Ecognosis Advisory — is striking a notably calm tone on crude while sounding a loud alarm on where the real opportunity lies.
“A spike is not a price increase”
On oil, Freris is measured almost to the point of contrarian. Yes, markets will react when they open. But his view is that the reaction will be far more muted than the headlines suggest.
“What is going to happen when the markets open is going to be very, very little,” he told ET Now. “They are getting very used to having wars around.”
His reasoning starts with the fundamentals. Iran accounts for just 3% of global oil production — a share so small, he argues, that even a complete disappearance of Iranian supply might not trigger a meaningful price spike. Crucially, Iranian output has been rising over the past two years, adding further buffer to global supply.
The real risk, Freris acknowledges, is geography rather than production. Iran sits alongside the Strait of Hormuz, through which a significant share of the world’s seaborne oil passes. A determined attempt to choke that passage could send prices sharply higher. But he remains sceptical that a sustained closure is realistic — pointing out that the US has deployed what he describes as arguably the largest naval firepower force assembled in the post-war period to the region, creating a significant deterrent.
The countries most exposed, in his view, are China and India, given their heavy reliance on Iranian crude imports. For India in particular — which sources a substantial portion of its oil through the strait — any sustained disruption would land harder than for most.
Dollar as safe haven? Not this time
One of Freris’s sharpest observations cuts against a reflex that markets have relied on for decades: the rush to the US dollar in times of crisis.
“It is America who is declaring war. It is not somebody else,” he said pointedly. “I cannot understand why I should buy US dollar assets in order to avoid the crisis that the US itself is causing.”
It is a view that challenges one of the most deeply embedded assumptions in global finance — and one that could carry real weight if institutional investors begin to reach the same conclusion.
One clear trade: Defence, everywhere
On investment strategy, Freris wastes no time on nuance. His recommendation is unambiguous and has been consistent, he says, for the better part of five years: buy defence stocks.
“Buy defence stocks, full stop,” he said. “Whether they are American, whether they are European, or whether they are Indian — that is the best possible bet you can have.”
He is clear-eyed about the moral complexity of the call. Defence goods, by definition, are built to destroy. But from a purely investment standpoint, he sees the sector as the most structurally bullish trade available in the current environment.
European defence names have already delivered what he calls “astronomical performance” — a trend he expects to continue. Asian defence stocks have also impressed. And India, he notes, has developed a set of defence companies worth serious attention.
His message to investors already holding defence positions: buy more. To those who do not: act now.
The underlying logic is grimly simple. The world appears to be entering a prolonged period of elevated military conflict and defence spending. In that environment, the companies supplying that demand are, in his words, in a structurally bullish position with no obvious near-term ceiling.
“The world is entering a period where having wars appears to be the nice thing to do first thing on a Monday morning,” he said — with unmistakable sarcasm. “Defence stocks. All defence stocks.”