Trump Can Calm Oil Markets, But Cannot Decide When to Reopen the Strait; Oil Prices Are Far From Reflecting True Risks

On Friday this week, Brent crude pulled back before the weekend. Compared to before, following Trump's pressure on Israel this week, market concerns about damage to oil and gas infrastructure have eased somewhat. The market is now more likely considering scenarios like the US and Israel announcing "end bombing" or "concluding soon." Even if such statements appear, they may still be accompanied by sporadic bombing over weeks. But Trump is very likely to continue releasing similar rhetoric to appease global energy markets.

While the US and Israel can control when to cease fire, they cannot control when Iran will reopen the Strait of Hormuz, which is largely determined by Iran. Iran has already activated its oil weapon and will ensure this weapon produces the intended political effect. Having activated it, it must demonstrate its power to the world, especially to the United States. At current oil prices hovering around $100-110 per barrel, the impact is far from sufficient. The S&P 500 Index has only declined 4.4% since February 27, which is evidence of this. Brent crude needs to rise to at least $150 per barrel and be sustained for a period of time before Iran can claim its oil weapon is truly powerful. Meanwhile, US stocks need to experience a $ETH 10%-15% decline, causing substantial economic pain to American consumers and investors, and creating real political pressure on Trump. For Iran, this is an important means of deterring future attacks and a way to shape the post-war negotiation landscape.

(The above views are for reference only and do not constitute investment advice) #Gate13周年全球庆典 #美伊战争进展 #