Reuters: Oil price fluctuates as Trump’s Iran deadline turns markets into a waiting room
The moment in global energy markets arrived in a tense burst of numbers and warnings: oil prices swung sharply as the deadline set by US President Donald Trump for Iran to open the Strait of Hormuz drew closer, and traders tried to guess whether diplomacy or escalation would win the hour.
Brent crude climbed above $111 a barrel in early trade before easing back toward $107, a reminder that markets were reacting not just to supply and demand, but to the possibility that the next move could come from the White House or from Tehran. For people watching from trading desks, shipping lanes, and households already uneasy about prices, the day felt less like a market session than a waiting room.
Why is the oil price fluctuating now?
The immediate trigger is the deadline Trump set for Iran to agree to open the Strait of Hormuz, a critical shipping route for oil and gas from the Middle East. Trump said Iran could face severe consequences if it did not reach a deal by 20: 00 Washington DC time on Tuesday, and his remarks intensified uncertainty across energy and financial markets.
That uncertainty is not only about whether oil can move, but how safely it can move. Middle East shipments have already been severely disrupted after Tehran threatened to attack vessels using the strait in retaliation for US and Israeli airstrikes since 28 February. Even when oil is available, the cost of moving it can rise quickly if insurers, shippers, and buyers all demand more protection.
Ye Lin, a researcher at Rystad Energy, said the early rise in oil prices suggested investors believe a deal may be harder to reach than expected because of Iran’s hardline stance, and that the war could last longer than markets had hoped. She also raised the question of whether Trump wants a deal or is, in her words, just putting up a smokescreen while preparing for a larger attack.
How are markets and consumers feeling the pressure?
The strain is already visible beyond crude prices. US stock markets opened lower and traded unevenly after Trump escalated his threats on Tuesday morning. By the close, the Nasdaq was about 0. 1% higher, the S& P 500 ended flat, and the Dow slipped about 0. 2%. The message from investors was cautious rather than calm.
That caution has a human side. Tineke Frikkee, senior fund manager at W1M, said even if an agreement ends the conflict soon, the economic benefits would not arrive quickly. Oil flows might resume through the Strait of Hormuz sooner, but they would still need time to reach their destination. For other commodities, including liquid natural gas, facilities have been turned off and could take three to four months to come back online.
Frikkee also pointed to the rising cost of shipping itself. A vessel may be allowed through the strait, but insurance has climbed sharply, and competing demand from different countries can push available capacity toward the highest bidder. In that kind of market, the cost pressure can travel far from the battlefield and settle in supply chains, factories, and household budgets.
What do Trump, Iran, and traders expect next?
Trump said at the White House that he believed “reasonable” leaders in Iran were negotiating in good faith, while also saying the outcome remained uncertain. On social media, he used even starker language, warning of catastrophic consequences. Iran, for its part, has rejected temporary ceasefire proposals and is demanding a permanent end to the war and the lifting of sanctions.
That gap between the two sides leaves traders with few clear signals. Some Asian countries have already made deals with Iran to get their ships through the strait because their economies rely heavily on energy from the Gulf. But the broader environment remains fragile, especially with the US-Israel war with Iran still unresolved and shipping risk still elevated.
The larger economic worry is that higher energy costs could feed inflation at a time when markets are already sensitive to every shift in geopolitical risk. Jamie Dimon, chief executive of JPMorgan, warned that global interest rates could rise if the conflict continues to push inflation higher. For businesses and consumers alike, that would mean the pressure does not stop at the pump or the port.
As the deadline passes and traders watch the oil price fluctuate, the real question is whether the next headline will bring relief or another round of uncertainty. In the meantime, the Strait of Hormuz remains more than a shipping route; it is a narrow passage carrying the weight of global nerves.
