Oil prices jumped more than 1% after President Donald Trump asserted the U.S. no longer needs a deal with Iran, reversing earlier market optimism about de-escalating Middle East tensions.
Trump’s comments, made on Thursday on Truth Social, directly challenged the market’s recent direction. His post came days after U.S. military action against Iran was deemed not necessary “at this point,” a development that had pushed prices lower. WTI is down 16% in November, and Brent has lost 20% before the latest remarks, according to a CNBC report.
Trump is losing his shit: "I have asked Vice President Vance to focus his complete and total attention on the Massive Corruption and Crime taking place in Democrat run Cities and States throughout the U. S. The Blue States, such as Minnesota, California, Illinois, and many more,… pic.twitter.com/zfHM54b4Oi”
“We don’t need a deal with Iran. Those days have long since passed. We’ve got their money, Hundreds of Billions of Dollars, and we’ve got their Strait!” Trump wrote, using his platform to declare a hardline stance on Tehran.
The reversal sent Brent Crude futures up 1.6% to $94.25 a barrel and West Texas Intermediate (WTI) futures up 1.3% to $87.62, according to CNBC. This erased the previous session’s declines and reintroduced a security premium for the Strait of Hormuz, a critical global oil shipping lane.
US President Donald Trump on Thursday said he was directing Vice President JD Vance to focus solely on domestic anti-fraud efforts and not negotiations with Tehran.https://t.co/6PJTKmkFIh pic.twitter.com/5G7ApN11aH
Experts Doubt End of Hostilities
Market analysts warned that Trump’s assertive posture may not lead to lasting peace. John Kilduff, a partner at Again Capital, told CNBC that investors may have been too quick to price in an end to the fighting.
“The market may have gotten ahead of itself on pricing in a cessation of hostilities,” Kilduff said, adding that renewed doubts about a deal would push the security premium in oil prices higher.
🇺🇸🇮🇷 Vance considers direct talks with Iran's security chief as Trump privately calls previous Iran deal a MISTAKE Trump has reportedly put Vance in charge of negotiations to end the Iran war, sidelining Witkoff and Kushner. He apparently now regrets the June agreement Vance… pic.twitter.com/Hqk4MUocdc
He also noted that Trump’s claim of control over the Strait of Hormuz could provoke further Iranian attacks on shipping, thereby increasing the risk of prolonged supply disruptions.
“The President may be thinking that given enough time, the economic blockade of Iran will force them to either negotiate with the USA or result in a regime change as the Iranian economy collapses. The Iranians might have different ideas and continue to attack Middle East Infrastructure that results in higher prices and forces the President to the negotiating table,” said Andy Lipow, president of Lipow Oil Associates.
Trump’s statements reflect a continued commitment to a policy against Tehran. The U.S. asserts it holds Iranian funds and controls the vital waterway, diminishing prospects for a diplomatic settlement.
US Policy Shifts to Domestic Focus
Trump simultaneously directed Vice President JD Vance to focus on crime and corruption in U.S. cities run by Democrats, a move he claims could save more money than any deal with Iran. In his social media posts, Trump accused Democratic leaders of having corruption in their style of managing cities and states.
This domestic focus coincides with the establishment of a new 20-person U.S. task force, dubbed Task Force Iron Gate, aimed at identifying and disrupting illicit shipments crossing Iran’s land borders and the Caspian Sea. The initiative is designed to counter Tehran’s reliance on overland trade routes to circumvent the U.S. naval blockade.
However, a Telegraph report notes, however, that the initiative could also be a diversion, with an unnamed source suggesting that Israel and the US may have floated the plan as a red herring to distract Iran from their actual next move.
Washington's Maritime Announcement Impacts Markets and Tensions
The sharp messaging from Washington arrives amid escalating tensions in the waters of the Gulf and persistent restrictions on maritime navigation. International observers believe Washington’s announcement regarding the seizure of assets and the assertion of control over the maritime corridor deals a severe blow to ongoing negotiation efforts, potentially forcing Tehran into a more hardline stance.
The renewed uncertainty has implications beyond the oil market. US stock futures weakened, with Nasdaq 100 Index futures falling 0.9% and S&P 500 Index futures dropping 0.4%. The spike in oil prices also reignites inflationary pressures, complicating the Federal Reserve’s path for future rate cuts.
Energy stocks could benefit in the near term, while major fuel users such as airlines and transport companies face rising cost pressure, the report noted. The market will now closely watch whether the US and Iran take further action, and the ripple effects on confidence in technology stocks.