Devon Funds Morning Note - 11 March 2026

Wednesday 11th March 2026

Oil Eases, Nerves Persist

Global

US stocks have drifted lower overnight as investors remain on a tightrope of caution amid the continuing conflict and recent swings in oil prices. The S&P 500 slipped 0.2% the Dow edged down 0.1%, while the Nasdaq is flat as investors consolidate after the sharp rebound that followed President Trump’s comments suggesting the war might be “very complete, pretty much”, while the markets await the next headline.

Oil prices dropped, with WTI Crude down 8.5% and Brent down 8%. Crude is now trading 30% higher than before the Iran conflict, but 30% lower than its recent peak of $90.7 per barrel.

Iran has stated they show no appetite for a truce, with people showing support for their newly elected leader, and Iran’s parliament speaker saying Iran is “absolutely not” seeking a ceasefire.

News from the Strait of Hormuz saw Iran's Revolutionary Guard (IRGC) spokesman General Ali-Mohammed Naeini saying: "If aggression by the US military and the Zionist regime against Iran and its infrastructure continues, the armed forces of the Islamic Republic will not allow the export of even one litre of oil from the region to the hostile side and its partners until further notice". With reports that Iran has started to deploy mines in the Strait.

The US reported that it carried out its most intense day of strikes so far, destroying 50 more Iranian naval ships. Officials said Iran is running low on ammunition, with Iranian ballistic missile attacks down 90% and one-way drone strikes down 83% since the operation began. Trump also said, “If Iran has put out any mines in the Hormuz Strait, and we have no reports of them doing so, we want them removed, IMMEDIATELY! If for any reason mines were placed, and they are not removed forthwith, the Military consequences to Iran will be at a level never seen before. If, on the other hand, they remove what may have been placed, it will be a giant step in the right direction!”

With The Strait remaining near shut (reports of some tanker movements), Saudi Aramco’s chief executive announced the company expects to restore about 70% of its oil exports “within days” by rerouting flows through a pipeline to Red Sea ports, avoiding the Strait of Hormuz, where around 25 super tankers are ready to load roughly 50 million barrels for Europe and the US.

The line’s 5-million-barrel-a-day capacity cannot fully replace Saudi Arabia’s usual 7-million-barrel export flow, but it does cover a significant portion. Combined with possible releases from strategic reserves, this gives the US and its allies more time to respond to the disruption. However, the main concern is that there is no alternative route for large volumes of refined products except through the Strait. Even if more crude becomes available, major refiners like China and Thailand are cutting exports. This means the bigger risk now is a growing shortage of refined products, not just higher crude prices, which keeps the fuel market outlook uncertain.

New Zealand

Back home, the NZX 50 bounced on the day to finish flat at close as easing oil prices and a steadier global backdrop tempted some buyers back after recent heavy losses. Gains were led by Summerset (+2.5%), Precinct (+2.3%), and Scott Technology (+3.5%).

Air New Zealand, after a tumultuous few days, has suspended its second-half 2026 earnings guidance, citing volatility in global jet fuel prices, after its estimated daily fuel bill roughly doubled to 8-9 million New Zealand dollars from about $4 million. The airline had been guiding to a second half pretax loss similar to, or slightly worse than, the 59 million dollar loss in 1H26, but the fuel shock now adds to existing pressures from engine problems, intensifying competition, higher costs, a soft economy, and a stretched balance sheet ahead of a heavy capex programme.

Winton Land has received a key green light for its flagship Sunfield project, with conditional approval granted for a large master planned community south of Auckland that significantly de risks its development pipeline. The consent covers 3,854 homes alongside a new school, a sizeable 47 hectare business park and a 7.7 hectare town centre, effectively locking in the framework for a mixed use precinct that combines residential, employment and retail uses on one site.

Lastly, Port of Tauranga has taken another step forward on its long-planned Stella Passage expansion, appointing the Environmental Protection Authority expert panel to assess its new fast-track consent application. The project would extend the Sulphur Point container berth and the Mount Maunganui wharves within the port’s existing footprint, adding berth capacity, associated reclamation and dredging to handle larger ships and ease current congestion. The decision is expected in September, with the Environmental effects having previously been found to be minor to negligible from a Western science perspective, but the application still needs to navigate cultural impact concerns raised by local iwi and hapū.

Australia

The Australian market followed the rebound, with the ASX 200 posting solid gains, rising 1.1% on the back of President Trump suggesting the Iran conflict could soon cool. In response, the Energy sector fell (-2.9%), with earlier outperformers Karoon Energy, Woodside, and Santos quickly underperforming, falling 3.5-6.8% on the day.

Consumer Staples ended the day lower, while Tech once again emerged as the strongest sector (+1.9%). Within the Tech space, Life360 rallied 10.3% on news that it has now been added to the US S&P Small Cap 600, effective on March 20.

Materials jumped back into the green, with BHP rebounding to gain 2.3%, alongside lithium names Mineral Resources (+5.8%), Liontown (+5.3%), and PLS Group (+5.2%). In the same space, Orica fell 3.4% after a soft business update, with weak cash flow and sizeable one-off items.

Elsewhere, Pro Medicus (+6.2%) and CSL (+1.7%) saw decent gains, propping up Health Care, despite CSL going ex-dividend and announcing plans to spend $2.1bn to expand its plasma manufacturing operations in the US. Telix Pharmaceuticals jumped 7.8% after releasing encouraging early-stage data from its global phase three drug trial for advanced prostate cancer, with investors taking the positive signal for the drug’s commercial and clinical prospects.

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