Despite President Donald Trump proclaiming the Iran conflict will end in “two to three weeks,” oil prices spiked this week, and the markets were not soothed. “A word or social media post” from Trump “used to spark big moves in prices,” said the BBC. Investors would leap on “signs” that things could “escalate or come to an end.” But now traders seem to be “growing more skeptical about the value of his comments.”
What did the commentators say? At the outset of the conflict, oil prices were “sensitive” to the president’s comments, but his view of the war “seems to change hour by hour,” said The Telegraph. His “stream of often contradictory statements” has made many wonder if they can “trust the messaging” coming from the U.S. administration, and some traders have drawn back from the market, “leaving prices increasingly untethered from reality.”
However many solutions to the current global oil crisis Trump comes up with, the oil market isn’t listening anymore, and the price of oil “keeps rising,” said Matthew Lynn at The Spectator. There’s simply no point in the president “trying to talk the price of oil back down again. It just won’t work.”
His “Persian TACO” (Trump Always Chickens Out) tactic may have “run its course,” said Eduardo Porter at The Guardian. “Making extreme threats” and then walking them back may “provide Trump with the illusion of agency,” but he “no longer has control” of events in Iran. The markets are “figuring out” that it will probably be Tehran, not the U.S., that decides when the conflict ends.
What next? “It’s important to distinguish between price movements” and overall stability, said Zachary Karabell at The Washington Post. “After nearly three weeks of this conflict,” the global financial system is “functioning without panic or alarming signs of stress.”
The “smooth functioning” of the financial system, “in the face” of crises like the oil shock, “gets little attention, probably because stability is not news,” said Karabell. But financial institutions and governments have “improved at monitoring” risks, and that should “at least provide some relief in a world full enough of fears.”
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