Trump's oil 'jawboning' loses punch as wars spiral
UNITED States President Donald Trump’s trademark ability to talk down oil markets with a few words is fading as the Iran war drags on, leaving global energy prices far more exposed to escalation.
Donald Trump's ability to influence oil markets through his words has lost its potency as the Iran war continues, leaving energy prices more vulnerable to escalation. The Republican president's "jawboning" was once a defining feature of the Iran conflict's early months, with his public statements and social media posts helping keep oil prices below record highs.
Trump predicted that a ceasefire with Iran would lead to a dramatic drop in oil prices, and traders may have been willing to bet against his desire to avoid a domestic fuel price spike. However, as the ceasefire broke down and the conflict spread, market confidence in Trump's control weakened, undermining his efforts to lower diesel prices ahead of the US midterm elections.
Despite Trump's attempts to calm markets by highlighting the recovery in oil flows through the Strait of Hormuz, it has proven difficult to convince traders that supplies will remain secure. The administration is now struggling to find ways to cool the diesel market, with US diesel prices reaching new records of $6.50 a gallon. Trump announced an agreement with President Vladimir Putin to resume some diesel exports, but the volumes involved are modest and unlikely to significantly impact global demand.
Energy markets remain in a precarious position, with two million barrels per day of refining capacity lost and global oil inventories sharply reduced. While Trump can still influence energy markets with his words, his power has clearly diminished as the web of conflicts has become more complex.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
