Talk therapy fails Trumps erratic Strait of Hormuz messaging roils oil markets

Talk therapy fails: Trump's erratic Strait of Hormuz messaging roils oil markets

TEHRAN- In the wake of the joint US-Israel military action against Iran, Donald Trump’s attempts to manage the ensuing geopolitical and economic fallout appear to be backfiring, creating a fog of war that has sent global oil markets on a tumultuous ride.

The administration’s credibility gap

Far from calming tensions, the administration’s scattered and often contradictory messaging regarding the critical Strait of Hormuz has been described by analysts as a "source of volatility" itself, undermining confidence in Washington's strategy. The week began with oil prices spiking toward $120 a barrel on fears of a protracted conflict disrupting supplies from the West Asia. Donald Trump sought to temper the surge by declaring the war was "very complete, pretty much" and that the military operation would be a "short-term excursion." This optimistic assessment was enough to trigger a sharp reversal in prices, offering a moment of relief to global markets.

A single erroneous post wipes out millions

However, the reprieve was short-lived and chaotic. The administration's credibility was dealt a significant blow when Energy Secretary Chris Wright posted—and quickly deleted—a message on social media claiming the US Navy had successfully escorted an oil tanker through the Strait of Hormuz. White House Press Secretary Karoline Leavitt was forced to concede that "no such operation had occurred," clarifying that the military was merely "drawing up additional options." This single erroneous post caused the benchmark US crude futures price to plummet nearly 20% in minutes, wiping out approximately $84 million in market value from a crude oil exchange-traded fund before the market corrected itself. Robert Yawger, a commodity expert at Mizuho Securities, called it "an unforgivable mistake," highlighting how the confusion leaves investors struggling to navigate the "fog of war."

Global economy faces catastrophic consequences

The confusion was compounded by Trump’s own flurry of social media activity. In a series of rapid-fire posts, he first insisted there were "no reports" of mines, then urged Iran to remove them, and finally announced the US had "hit, and completely destroyed, 10 inactive mine laying boats." This frenetic communication style has frustrated observers on Wall Street and in Washington.

“There is an element of randomness both politically and in how markets are reacting to all of this,” Michael Rosen, Chief Investment Officer at Angeles Investments, told reporters. While the White House projects confidence, global media outlets are quoting officials and experts who point to a lack of coherent strategy. Senator Christopher Murphy (D-Conn.) stated bluntly that the administration has "no plan for the Strait of Hormuz" and does "not know how to get it safely back open." Meanwhile, the situation on the ground remains dire. The Strait of Hormuz, through which about a fifth of the world's oil passes, is effectively closed to nearly all traffic. Amin Nasser, CEO of Saudi oil giant Aramco, has described the disruption as "the biggest crisis the region’s oil and gas industry has faced," warning of "catastrophic consequences for the global economy" if it continues. As the G7 and the International Energy Agency scramble to coordinate the release of emergency oil reserves to stabilize the market, the core problem remains Washington's credibility gap. With the US military signaling an escalation and diplomacy off the table, the world is left to interpret a stream of inconsistent signals from the White House, turning energy markets into a "roller-coaster ride" with no clear end in sight.

source: tehrantimes.com