Oil Prices Climb as Trump Says No Iran Deal Is Needed

Preface

Oil prices rose Thursday after U.S. President Donald Trump said the United States did not need an agreement with Iran, unsettling expectations that the conflict might soon end. His comments renewed concerns about the security of shipping and the possibility of continued disruption around the Strait of Hormuz, a critical route for Middle Eastern energy supplies. Brent crude and West Texas Intermediate (WTI) futures both advanced, even though they had fallen sharply in November after earlier remarks from Trump appeared to reduce the risk of further attacks. This article examines the market move, the competing views of oil analysts, and the central disagreement between Washington and Tehran. The key distinction is between near-term oil availability and the risk premium embedded in longer-dated prices.

Lazy bag

Oil prices rose as Trump’s remarks cast doubt on the prospect of a near-term U.S.-Iran agreement. Brent crude gained 1.9% to $94.48 per barrel, while WTI futures rose 2% to $88.19 per barrel. Analysts said ample near-term supply may keep prompt prices relatively contained, but costly insurance and tanker rates are supporting longer-dated contracts. They also cautioned that markets may have been too quick to assume fighting would stop. Uncertainty over shipping through the Strait of Hormuz remains a central source of potential supply risk.

Main Body

U.S. oil prices moved higher Thursday after President Donald Trump made comments that raised questions about whether the U.S.-Iran conflict would end through a negotiated agreement. Brent crude traded 1.9% higher at $94.48 per barrel, while West Texas Intermediate futures gained 2% to $88.19 per barrel. The increase followed a period of weakness in oil markets, as investors had interpreted earlier comments from Trump as reducing the chance of additional attacks on Iran.

In a post on Truth Social, Trump said, “We don't need a deal with Iran. Those days have long since passed. We've got their money, Hundreds of Billions of Dollars, and we've got their Strait!” His statement challenged the assumption that diplomatic progress would soon bring an end to hostilities. It also drew attention to control and security around the Strait of Hormuz, where any disruption could affect the movement of oil and other goods from the region.

Analysts described a market shaped by two different time horizons. Jeffrey Currie, founder of Real Macro and a widely followed Wall Street forecaster, said near-term oil prices could remain relatively tame because a substantial volume of oil was now coming out of the Middle East. That availability can help limit immediate price pressure. At the same time, Currie said exceptionally high insurance and tanker rates were keeping longer-dated oil futures contracts elevated.

Currie explained the difference by saying, “While it caps the prompt barrel, it does nothing to cheapen the next one, which is why you can't get bearish here nor can you get really bullish.” He made the remarks to CNBC’s “The Exchange.” His view points to a market in which current supply may be sufficient, while uncertainty about future transportation and deliveries continues to influence prices. In other words, a relatively calm near-term market does not necessarily mean traders expect long-term supply risks to disappear.

On investment positioning, Currie said he continued to favor long-dated oil as well as stocks of drilling and production companies. This preference reflects the possibility that elevated transport costs and unresolved geopolitical risks could remain relevant to future oil prices. It does not imply certainty about the direction of the market; rather, it reflects a distinction between immediate physical supply and the longer-term risks associated with producing and moving oil.

Thursday’s gains came after oil had been under pressure following comments by Trump after the U.S. midterm elections. Those remarks eased fears of further strikes on Iran. In November, WTI was down 16%, while Brent had lost 20%. The scale of those declines indicates how strongly market expectations about the conflict had shifted before Trump’s latest statement prompted renewed concern.

On Sunday, Trump said fresh attacks were highly unlikely as talks to end the conflict progressed. His comments came despite reports from both countries that shipping had been hit in or near the Strait of Hormuz. He also said further military action did not appear necessary “at this point.” Taken together, these statements had helped ease concerns about a prolonged interruption to oil supplies from the Middle East. Thursday’s remarks, however, left investors reassessing how durable that easing might be.

John Kilduff, a partner at Again Capital, said investors may have moved too quickly to price in an end to the fighting. “The market may have gotten ahead of itself on pricing in a cessation of hostilities,” Kilduff told CNBC. He warned that renewed doubts about a deal could push the security premium in oil prices higher. A security premium is the additional amount traders may factor into prices when they see a greater risk that conflict could disrupt supply or transportation.

Kilduff also said Trump’s assertion that the United States controls the Strait of Hormuz could encourage further Iranian attacks on shipping. If that occurred, the risk of extended supply disruptions could rise. The market impact would depend not only on the volume of oil available, but also on whether ships could travel safely, how much it cost to insure them, and how long any disruption lasted. These factors help explain why concerns about shipping can influence longer-dated futures even when current supplies are substantial.

Andy Lipow, president of Lipow Oil Associates, described a possible strategic calculation behind the U.S. position. “The President may be thinking that given enough time, the economic blockade of Iran will force them to either negotiate with the USA or result in a regime change as the Iranian economy collapses. The Iranians might have different ideas and continue to attack Middle East Infrastructure that results in higher prices and forces the President to the negotiating table,” Lipow said.

Lipow added that he did not believe either side’s negotiating position had changed. He said Iran wanted the blockade to end, sanctions to be lifted, and a ceasefire that included Lebanon to be declared. The United States, by contrast, wanted Iran to dispose of its entire nuclear stockpile and allow free transit through the Strait of Hormuz. Those differences suggest that a resolution may remain difficult, even as both sides’ actions and public statements influence financial markets.

For oil traders, the key question is therefore not simply whether a deal is announced. They must also assess whether shipping can continue safely, whether supply routes remain open, and whether insurance and tanker costs decline. The Thursday price increase showed how quickly expectations can change when political statements challenge the idea that hostilities are nearing an end. The competing signals leave the market balancing available near-term barrels against the possibility of more persistent transport and security risks.

CNBC’s Pippa Stevens contributed to the report.

Key Insights Table