The global oil market has rarely been more sensitive to a single geopolitical variable than it is right now.
The Strait of Hormuz, through which approximately 20% of the world's oil supply flows, has been at the centre of the US-Iran conflict that drove Brent crude above US$114 per barrel in May 2026.
When credible reports of US-Iran peace negotiations emerged, Brent fell from US$115 to US$103 per barrel in a single session, as markets began unwinding the geopolitical risk premium that had built up over months of conflict.
The ASX 200 rose 0.4% on that same day as lower oil prices lifted consumer discretionary and travel stocks, while energy names fell sharply.
Three stocks in particular deserve close attention from investors trying to understand what a lasting peace deal would mean for their portfolios.
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Qantas Airways Ltd (ASX: QAN)
Jet fuel is the single largest cost for any airline.
When oil falls, airline margins expand quickly, and no ASX-listed company benefits more directly from lower oil prices than Qantas.
Qantas shares surged almost 5% on 25 May 2026 as oil prices fell on peace deal optimism, reversing months of fuel cost-driven underperformance.
Qantas hedges a portion of its fuel exposure, which smooths the benefit over time, but a sustained decline in oil would meaningfully reduce cash costs across the group.
The scale of the fuel cost headwind Qantas has been managing in 2026 is significant.
In April, the company revealed that second-half FY 2026 jet fuel costs are now expected at $3.1 to $3.3 billion, more than double previous expectations, as the Middle East conflict drove oil prices sharply higher.
Ausbil co-portfolio manager Mans Carlsson described Qantas as the most undervalued stock in his fund, noting that the market has priced in the assumption that oil prices will remain elevated.
He added that investors need to look through the current geopolitical crisis, stating:
At present, Qantas is trading at an FY28 price-earnings ratio of approximately seven times, which is extremely low versus the market average.
A lasting peace deal would remove the single biggest headwind the business has faced in 2026.
Flight Centre Travel Group Ltd (ASX: FLT)
The link between a US-Iran peace deal and Flight Centre is less direct but equally important.
Middle East tensions have been a primary driver of the 36% year-to-date decline in Flight Centre shares.
Management confirmed a $10 million profit hit in April from increased refunds and cancellations driven by the ongoing hostilities.
A sustained reduction in geopolitical risk would directly reduce leisure travel cancellations.
It would also support booking confidence and help the corporate travel division win back volume on international routes through the Gulf.
A peace deal that resolves Middle East uncertainty would likely be the single most important near-term catalyst for a re-rating in Flight Centre shares.
Woodside Energy Group Ltd (ASX: WDS)
The relationship between a peace deal and Woodside is the most nuanced of the three.
A lasting peace deal that reopens the Strait of Hormuz and returns Iranian oil to global markets would push oil prices lower.
This would be bad for Woodside's revenue in the short term.
However, a more stable geopolitical environment would also reduce the risk premium in global energy markets and lower volatility, which has made Woodside shares difficult to own throughout 2026.
Woodside fell 4.2% to $30.49 in early May as peace deal optimism pushed oil lower, before recovering as talks stalled.
Today, the stock trades at a much higher price than at the beginning of the year.
The share price is supported by the Scarborough LNG project, now 94% complete, and first cargo targeted for Q4 2026.
If a peace deal does push oil back toward US$90, Woodside's LNG portfolio and contracted revenue base should still generate strong earnings at that price level.
Long-term investors would be buying a business with decade-long LNG contracts at a more attractive price than 2026's elevated oil environment has permitted.
Foolish Takeaway
A US-Iran peace deal has not been confirmed, and as of today, peace negotiations remain uncertain with fighting ongoing.
Each of these three ASX shares carries meaningful risk if talks collapse and oil prices spike again.
But for investors who believe the direction of travel is toward de-escalation, Qantas, Flight Centre, and Woodside each offer a very different but equally interesting way to position for that outcome.
