Investors are hunting for the “pain point” that prompts US President Donald Trump to make policy pivots on his war in Iran as his social media posts ignite severe swings in the oil market.
Since Trump launched the war in the Middle East, he has tended to intensify his threats against the Iranian regime over weekends, when oil markets are closed, and hint at impending peace when prices are rising.
The messages are part of his administration’s efforts to tamp down petrol price inflation just months ahead of midterm elections when an affordability crisis will be on voters’ agenda.
The pattern underscores the centrality of oil markets to the course of the conflict, along with the White House’s success – at least so far – in preventing crude prices from spiralling out of control.
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“It is clear that [Trump] is fearful of high prices at the pump ... Gasoline over $4 (€3.46) is a political killer,” said Jorge Montepeque, oil analyst at Onyx Capital Group. “On the other side of the ledger is his ego. He can’t be seen to have lost.”
Brent crude hit a high above $119 a barrel on March 9th and has gyrated violently over the past few weeks as Iran has launched strikes against ships traversing the Strait of Hormuz and energy facilities across the Gulf.
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US consumers and businesses are beginning to feel the effects: petrol prices have jumped more than a third to almost $4 a gallon, while diesel – a vital fuel for industry – has exceeded $5.
One senior energy trader pointed to what they saw as a clear pattern: whenever US oil prices – currently trading around $10 below Brent – approached $95 to $100 a barrel, the administration’s de-escalatory rhetoric intensified and market speculation about potential government intervention in the oil market grew louder.
So far, they said, such “jawboning” had helped cap prices. But they also warned that the market could break sharply higher if physical shortages began to emerge.
Several traders said they believed oil prices should be higher given the scale of disruption the Iran war has caused, but that there were not many people brave enough to trade against Trump’s interventions via social media posts and television interviews that they view as designed to knock down prices.
“These claims are totally false. President Trump has been completely transparent with Americans about these temporary, short-term disruptions and he is focused on doing the right thing – which is eliminating the Iranian terrorist regime’s threat to America and our allies,” said White House spokesperson Taylor Rogers.
Investors have grown used to Trump’s capricious policymaking since his toing and froing on tariffs this time last year – when his numerous U-turns spawned the phrase “Trump Always Chickens Out” (Taco).
But the past week of conflicting messaging has taken Trump’s unpredictability to new heights.
Since Friday, the US administration has threatened to release hundreds of millions of barrels of oil from its Strategic Petroleum Reserve, deployed elite paratroopers from the Army’s 82nd Airborne Division to the Middle East and threatened to “obliterate” Iran’s power plants – all while suggesting that peace negotiations with unidentified Iranian officials are progressing well.
[ How and when will oil price rises affect the cost of flights and holidays?Opens in new window ]
“There are now so many competing headlines signalling intensification versus de-escalation of the war in Iran, we have crossed over into fiction,” said Mike O’Rourke at New York-based broker Jones Trading.
US borrowing costs have meanwhile risen to their highest level in nearly 12 months as costlier oil drives up inflation expectations and forces traders to concede that the Federal Reserve may not cut interest rates this year.
The benchmark 10-year yield, which sets government borrowing costs, has risen by roughly 0.4 percentage points so far this month, its worst performance since late 2024.
Figuring out when the next “Taco” moment will arrive has become Wall Street’s latest obsession. Deutsche Bank’s head of cross-asset strategy, Maximilian Uleer, this week developed a “pressure index” as a “proxy for upcoming rhetoric or strategic adjustments by the US administration”.
The index factors in the one-month change in Trump’s approval ratings, one-year inflation expectations, the performance of Wall Street’s S&P 500 and US Treasury yields.
“If the index moves up, a probability of strategic adjustment by the US administration is more likely,” Uleer said. “If all four pain points hurt, the incentive to adjust is very high.” The index is currently near its highest level since Trump regained the presidency.
Monica Defend, head of the Amundi Investment Institute, said Trump had become “much more sensitive” to Treasury yields during his second term.
“As soon as the [10-year] Treasury nears 4.5 per cent, the administration is getting really nervous, and usually that’s when they act. As investors you need to anticipate that,” she said.
Other investors are simply waiting out the chaos, too worried about being caught offside by Trump’s next post on Truth Social.
“We’re all doing the same thing – nothing,” said the chief investment officer of a North American hedge fund. “You can’t short oil because it could easily rip to $150. Or the war could end in five minutes.” – Copyright The Financial Times Limited 2026
