As Trump transfers the burden of the Hormuz closure to oil-dependent nations, oil prices soar.

Following US President Donald Trump’s speech on Thursday, oil prices spiked. The price of Brent crude surpassed $105 per barrel. The US West Texas Intermediate surpassed $103. Prices had, ironically, been declining prior to his talk.

In the hopes that the speech might indicate a shift toward peace in the fight with Iran, traders were anticipating it. Oil dropped more than $1 early on Thursday as traders speculated that the US would withdraw from the conflict. Trump said in his speech that the US does not require oil from the Strait of Hormuz. He said that the US may become energy independent and receives nearly little oil from that source.

Trump advised other nations that depend on the strait’s oil to safeguard it on their own. Additionally, he recommended that allies take action to safeguard their supplies or purchase additional oil from the United States.

Traders were not reassured by his remarks. Many had hoped that the speech would provide clarity regarding the processes to reopen Hormuz or a truce. Rather, supply risk persisted in the marketplace, maintaining high prices.  Costs are impacted in numerous sectors by the increase in oil prices. Increased oil usually results in higher gasoline prices, which can raise the cost of goods and transportation globally.

Markets were hoping Trump to announce an end-date for the war. However, in his speech, Trump didn’t mention any such timeline. Earlier, he has told media that he would like to wrap up the Iran war within two-three weeks. 

On the contrary, Trump’s speech spooked markets as he spoke about hitting Iran’s energy infrastructure. In his address on Thursday, Trump said, “If there is no deal, we are going to hit each and every one of their electric generating plants very hard, and there’s not a thing they could do about it.”