The United States and Israel are wiping out Iran militarily.
Iran had one card left to play.
But Donald Trump made one bold promise that just steamrolled Iran.
The Iranian regime’s only hope for survival is to destroy domestic political support for the war, so pressure forces Trump to call off attacks.
Iran’s only means of achieving that goal is to drive up energy prices.
To do so requires closing the Strait of Hormuz, through which one-fifth of the global oil supply flows.
Iran has attacked multiple vessels, causing 150 tankers to drop anchor since insurers are canceling contracts for oil vessels.
Oil prices then shot up $10 a barrel to $77.
President Trump responded by announcing that the U.S. government would step in to provide insurance guarantees for maritime trading companies shipping oil through the Persian Gulf.
“Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf,” Trump wrote on Truth Social.
Trump also announced the U.S. Navy would provide escorts to any oil tankers sailing through the Strait of Hormuz.
“This will be available to all Shipping Lines. If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz as soon as possible. No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD. The United States’ ECONOMIC and MILITARY MIGHT is the GREATEST ON EARTH — More actions to come,” Trump added.
The risk to oil markers is real.
Goldman Sachs warned that a prolonged closure of the Straight of Hormuz could cause oil prices to skyrocket to $100 per barrel.
“If Hormuz volumes were to remain flat for 5 additional weeks, Brent prices would likely reach $100, a level associated with larger demand destruction to prevent inventories from falling to critically low levels,” a company forecast read.
Senior Market Analyst at Tradu.com wrote that oil price shocks could cause an inflationary spiral, writing that “the supply disruption tailwind could quickly turn into a demand destruction headwind. A prolonged conflict and sustained high prices may fuel oil-driven inflation and amplify economic risks stemming from renewed tariff uncertainty. That combination could weigh on consumption and ultimately pressure oil prices.”
But President Trump assured Americans that it wouldn’t be the case.
Trump told reporters that the U.S. military campaign was ahead of schedule and that it was possible the conflict would end sooner than anyone thought.
“We have the strongest, by far, military in the world, and we will easily prevail. We’re already substantially ahead of our time projections,” Trump declared. “But whatever the time — it’s okay, whatever it takes — we will always— and we have, right from the beginning, projected four to five weeks. But we can go far longer than that.”
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