Donald Trump has once again toughened his tone against Iran, praising the effectiveness of the American blockade and threatening Tehran, an escalation which is causing oil prices to rise despite markets still convinced that an agreement remains possible in the short term.
“Iran is no longer doing any trade, paying neither its army nor any of its bills, and is quickly becoming a failed state! Large quantities of oil are being exported. Praise be to Allah!” Donald Trump is back in a verbal war with Tehran and is increasing his comments on his Truth Social network.
This return of hostilities is causing oil to rise again. Crude prices continued to rise on Wednesday, in this context of new tensions between the United States and Iran. However, despite the military escalation and the increasingly offensive declarations of the American president, the markets continue to bet on a relatively rapid diplomatic outcome. Around 1:45 p.m. in Paris, a barrel of Brent from the North Sea for delivery in August increased by 1.92%, to $93.21. The American West Texas Intermediate (WTI) gained 2.22%, to $90.16.
The American president notably affirmed that the Iranians had “taken too long to negotiate an agreement which would have been excellent for them” and that they would now “have to pay the price”. In this other message, he praised the effectiveness of the maritime blockade imposed by Washington: “The media which spread false information refuse to report the effectiveness of the American naval blockade, the most successful blockade in the history of naval warfare. Nothing passes without our will. It is a wall of steel!”, he wrote.
The US president went even further in his rhetoric, declaring that “Iran is a lot of talk and no action” and that “the tyrant of the Middle East is dead.”
New surge in tensions
These declarations come after a new sequence of clashes between the two countries. Iran announced that it had targeted several American bases in the Gulf in retaliation for strikes carried out by Washington against Iranian objectives located along the Strait of Hormuz. These operations follow the destruction of an American helicopter attributed to Tehran. This resumption of hostilities constitutes a new blow for the negotiations initiated between the two capitals. Again on Tuesday, Donald Trump assured that he was close to a “very, very good agreement” likely to put an end to the conflict that has been open since February 28, citing a time limit of “two to three days” to reach a compromise.
Despite the rise in prices, oil prices remain far from the peaks reached at the start of the conflict. Analysts emphasize that investors remain relatively confident about the market’s ability to absorb the current disruptions.
“There is currently a lack of anxiety in the oil market, even if a peace agreement is unlikely in the current scenario,” observes Kathleen Brooks, analyst at XTB.
According to Tamas Varga, analyst at PVM, the majority of operators consider that “global oil supply will not fall into an unmanageable deficit in relation to demand”. A report published Tuesday by the American Energy Information Agency (EIA) confirms that global oil stocks are currently playing a shock absorber role. To meet demand, the market is drawing more and more from its strategic reserves in order to compensate for the fall in production linked to the virtual paralysis of the Strait of Hormuz.
Confident markets
The IEA estimates that production disruptions have already reduced global supply by 11.3 million barrels per day in May. This decline is expected to become even more pronounced during the second quarter of 2026, as storage capacities, particularly in Iran, reach their limits. For the moment, the markets nevertheless continue to factor in the hypothesis of an agreement between Washington and Tehran as well as a relatively rapid reopening of the Strait of Hormuz, the main crossing point for world oil.
“The market is currently pricing in an agreement between Washington and Tehran and a fairly rapid reopening of the strait,” underlines Arne Lohmann Rasmussen, analyst at Global Risk Management.
This anticipation today constitutes the main factor in moderating prices. But in the absence of a rapid resolution to the conflict, the situation could quickly evolve. As global stocks become depleted, supply tensions could then cause a new surge in crude oil prices.
/2022/12/02/638994d9d5adf_61168cfc8256bf7ea5ef3720-1.png "DIRECT. War in the Middle East: Iran responded to Washington’s overnight strikes by targeting American military bases")
