{"id":2099,"date":"2026-06-16T08:07:26","date_gmt":"2026-06-16T08:07:26","guid":{"rendered":"https:\/\/reliablemovingcrews.com\/?p=2099"},"modified":"2026-06-16T08:07:26","modified_gmt":"2026-06-16T08:07:26","slug":"oil-markets-bet-trump-would-chicken-out-on-iran-they-won","status":"publish","type":"post","link":"https:\/\/reliablemovingcrews.com\/?p=2099","title":{"rendered":"Oil markets bet Trump would chicken out on Iran. They won"},"content":{"rendered":"
LONDON, June 16 (Reuters) – Never bet against Donald Trump? The oil market appears to have made a risky wager from day one of the Iran war: The U.S. president would not allow the conflict to spiral into a full-blown economic crisis. So traders wouldn\u2019t price one in, no matter what was happening with physical supplies.<\/div>
It was a risky call, but it proved correct.<\/div>
Oil prices certainly \u200bswung during the three-and-a-half-month war, as Iran\u2019s key weapon was the unprecedented closure of the Strait of Hormuz. Tehran was able to choke off a fifth of the world\u2019s oil and liquefied \u200cnatural gas supplies overnight, gaining significant leverage.<\/div>
Benchmark Brent crude surged from around $70 a barrel before the war to a peak of $118 in late March, before sliding back to $83 after Washington and Tehran announced a preliminary deal on Sunday.<\/div>
Given that the supply disruption was one of the largest in modern history, these moves were remarkably restrained.<\/div>
Consider that oil prices surged to $123 a barrel in the aftermath of Russia\u2019s full-scale invasion of Ukraine in February 2022. This reflected market fears about the partial disruption of Moscow\u2019s oil exports, which had totalled around 7.5 million barrels per day (bpd) the \u200bprevious year. That is around half the effective volume lost during the Hormuz blockade.<\/div>
For decades, a Hormuz shutdown has been treated as the ultimate doomsday scenario for oil markets. Yet when it finally happened, prices jumped, \u200bbut they didn\u2019t spiral.<\/div>

BEND, DON\u2019T BREAK<\/h2>
On the surface, the explanation is straightforward: the physical market did its job.<\/div>
The global energy system displayed extraordinary flexibility and resilience. Governments and companies \u2060released hundreds of millions of barrels from commercial and strategic stockpiles. Luckily for them, production had been running hot heading into the conflict, with inventories rising quickly, which helped cushion the blow.<\/div>
Demand also adjusted. Once the war broke out, \u200bChinese imports weakened sharply, and across much of Asia, governments imposed consumption curbs to dampen energy use. That helped prevent a deeper economic shock.<\/div>
The system bent, but it didn\u2019t break.<\/div>
But that is only half the story, and arguably not the most \u200bimportant half.<\/div>

TRUMP PUT<\/h2>
Look more closely, and the market’s response to the drawdown in global inventories tells a different tale.<\/div>
Stocks were depleted at an unprecedented pace during the war, falling at an average rate of 5.3 million bpd between March and May, according to the U.S. Energy Information Administration. They were nearing dangerously low levels just as the northern hemisphere was entering peak summer demand.<\/div>
That should have been a flashing red warning sign. Instead, it appeared to reinforce confidence that a deal was near.<\/div>
What explains this?<\/div>
The implicit bet was clear: Trump would \u200bnot let the situation deteriorate to a point where U.S. gasoline prices would surge to unmanageable levels and risk reigniting broader inflation, especially with midterm elections looming. Put simply, investors believed he would blink before the market cracked.<\/div>
So the lower inventories \u200bfell, the closer a deal seemed.<\/div>
This pattern should be familiar.<\/div>
During Trump’s second term, markets have repeatedly learned to discount the most extreme outcomes implied by his rhetoric and initial policy moves, whether sky-high tariffs announced on \u201cLiberation Day,\u201d attacks on Federal Reserve independence, or \u200cthreats to take \u2060over Greenland.<\/div>
His most aggressive moves have invariably been followed by retreats once financial markets began to wobble.<\/div>
The so-called \u201cTrump put\u201d is no longer just about equities, however. During the Iran war, it shaped commodity markets as well.<\/div>
Markets weren\u2019t ignoring the risks. They were pricing in Trump\u2019s limits.<\/div>

YOU CAN ONLY GO SO FAR<\/h2>
But the oil market\u2019s \u201cTrump trade\u201d has boundaries.<\/div>
Unlike equities, which can be buoyed by sentiment for extended periods, commodity markets are ultimately anchored in physical reality. And reality was catching up with the president \u2013 and energy traders.<\/div>
Despite the market\u2019s remarkably effective response to the Hormuz shock, the loss of around 1.4 billion barrels of supply since the start of the war still punched a vast hole in global inventories. \u200bThat gap has not disappeared.<\/div>
Yet the deal announcement has dramatically \u200breduced the risk of a massive spike in \u2060oil prices \u2013 a warning that was sounded only two weeks ago.<\/div>
The challenge now is that supply and demand are unlikely to recover in step, pointing to a period of volatility.<\/div>
On the one hand, demand could spike.<\/div>
Refiners, traders and governments that drained inventories during the crisis will have to refill them. That will create a new wave of demand that could tighten \u200bmarkets as summer demand peaks and supply buffers remain thin.<\/div>
The strain is already visible in the United States. After pushing exports to record levels during the crisis, U.S. crude \u200binventories have fallen to their \u2060lowest since 2004, while gasoline stocks are at their lowest since 2014.<\/div>
On the other hand, supply could recover faster than many anticipate as revenue-starved Gulf producers scramble to regain market share. This could ultimately lead to a bigger price drop than traders are currently pricing in.<\/div>

TRADING THE TRUMP<\/h2>
Throughout the war, Trump’s jawboning of oil markets was effective, repeatedly boosting investor expectations for a quick resolution even as conditions on the ground deteriorated.<\/div>
The U.S.-Iran deal announced on Sunday was vague and offered limited gains for \u2060Washington. But it arrived \u200bjust as the market was running out of room. Its timing was probably not a coincidence.<\/div>
Investors understood that Trump’s tolerance for market \u200bpain had limits, and those limits mattered as much as pipelines, tankers and storage tanks.<\/div>
They bet on it. This time, they were right.<\/div>
(The opinions expressed here are those of Ron Bousso, a columnist for Reuters.)<\/div>
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