Donald Trump against the crude oil market

Global crude oil prices continue to swing sharply due to escalating tensions between the US and Iran, combined with the unpredictable actions of President Donald Trump. His public statements and social media posts are causing near-instant market reactions, forcing traders to constantly seek signals to anticipate price movements.

Analysts note that the Trump administration often issues aggressive statements on weekends, when markets are closed, while adopting a more conciliatory tone during periods of rising crude oil prices. This strategy is seen as an effort to limit gasoline and diesel price spikes ahead of elections, as fuel costs have a direct impact on voter sentiment.

In March, Brent crude reached $119 per barrel after attacks on ships and energy infrastructure in the Persian Gulf. Following Trump’s comments about potential negotiations and de-escalation, prices quickly dropped, highlighting how political signals are influencing the market.

American consumers are already feeling the effects: gasoline prices are approaching $4 per gallon, while diesel exceeds $5. This increases transportation and industrial costs and drives inflation expectations higher. Meanwhile, the yield on 10-year US Treasury bonds has reached near-year highs, raising doubts among investors about the Federal Reserve’s ability to cut interest rates soon.

A new trend has emerged on Wall Street — monitoring the so-called “Taco Moment,” when Trump abruptly changes his rhetoric under market pressure. To track this, Deutsche Bank created a “pressure index,” which incorporates changes in the president’s approval rating, inflation expectations, S&P 500 movements, and Treasury yields. High index readings indicate a stronger likelihood of strategic adjustments by the administration.

Analysts point out that Trump has become particularly sensitive to the 10-year Treasury yield. When it approaches 4.5%, the administration’s tone typically softens, impacting crude oil prices. During such periods, traders avoid short positions, as the market could spike or drop suddenly depending on developments in the Persian Gulf and the president’s statements.

The market remains highly uncertain: any news about escalation or de-escalation instantly shifts investor expectations. Interestingly, the administration’s “price freeze” signals via negotiations have so far prevented sharp spikes, but the risk of sudden price surges remains.

Many investors are taking a wait-and-see approach, wary of unpredictable posts from Trump on social media. As one hedge fund executive noted, “We all do the same thing — nothing — because crude oil could easily jump to $150 per barrel or collapse within minutes if the conflict ends abruptly.”

In this way, geopolitics, political signals, and the “Taco Moment” index have become key drivers of short-term crude oil price fluctuations, forcing investors to balance risk with anticipated responses from the US administration.

Tags: Iran, prices, USA, war, Hormuz