Trump's Iran War Speech Raises Oil Prices: 'We're Going to Take Them Back to the Stone Age' Not a word about NATO
“Important Update” promised by President Donald Trump on the war in Iran turned, on Wednesday night, into a belated appeal to American voters in an attempt to gain support for a conflict that started more than a month ago, CNN comments.
Trump gave the first official speech since the beginning of the war PHOTO EPA-EFE
UPDATE – Markets “are not interpreting the speech as positive”. The price of oil is exploding
Stocks fell, the dollar appreciated and oil prices rose after Donald Trump failed to provide a clear timetable on ending the conflict.
Prospects of an end to the month-long war between the U.S., Israel and Iran supported global markets and had previously sent the dollar down from recent highs in the past two sessions after a difficult March in which a sharp rise in oil prices destabilized risk assets.
However, the stock markets fell again after Trump said the US would strike Iran “extremely tough” in the next two to three weeks and will “brings the country back to the Stone Age”.
U.S. stock futures were down 0.67 percent and European futures were down 0.1 percent.
MSCI's Asia-Pacific index (excluding Japan) lost 0.75% and Japan's Nikkei index reversed the trend and closed down 0.79% in a volatile session.
Oil price rises after Trump vows to continue war
The price of Brent oil, the global benchmark, rose more than 4 percent to over $105 a barrel after Trump vowed to continue the conflict for several more weeks and reiterated his threat to bomb Iran's power plants if it did not accept the terms imposed.
WTI, the US oil benchmark, rose more than 3% after the speech, surpassing $103 per barrel, CNN notes.
Since the beginning of the war, more than a month ago, Iran has effectively blocked the Strait of Hormuz, the route through which about 20% of the world's oil passes. The situation triggered a global energy crisis, leading to accelerated price increases and the crossing of the $4 per gallon threshold for US gasoline.
However, in Wednesday's speech, Trump played down the impact of the situation, saying the U.S. did not “they need” of this route and suggesting that he is willing to end the conflict without reopening access through the strait. According to him, the responsibility should rest with the US allies.
The markets' immediate reaction prompted tongue-in-cheek commentary from conservative commentator Ann Coulter, who posted a screenshot of rising oil futures on the X platform with the message: “Trump's magnificent speech paid off! Well done Mr. President!”
Gold price drops after speech
Gold prices reversed course and fell more than 1 percent on Thursday, snapping a four-day streak of gains after Donald Trump said the U.S. would continue its war on Iran in the coming weeks, according to Reuters.
Spot gold was down 1.3 percent at $4,694.48 an ounce by 02:02 GMT, while U.S. gold futures were down 1.9 percent at $4,723.70.
Earlier, shares had risen more than 1 percent, hitting their highest levels since March 19, before Trump's remarks.
“Gold pulls back after two excellent days as President Trump struck a rather bellicose tone, hinting at aggressive plans for the coming weeks…this suggests the optimism of recent days has been overdone and a correction is ahead ahead of the long weekend.”said independent metals trader Tai Wong.
Initial news
In a roughly 20-minute speech, Trump cast the US attack as retaliation for nearly half a century of violence attributed to Iran and its allies, arguing that the state cannot be allowed to develop a nuclear weapon.
He highlighted the military advances made by the US in recent weeks, describing the bombing campaign as just “victories like few have ever seen”. At the same time, he asked for patience, describing the war as a “investment” in the future of Americans.
However, it did not provide a new answer to the main question that concerns the electorate: when the conflict will end.
“I am pleased to say that these core strategic objectives are nearing completion”Trump said, giving no further details on the exit strategy, limiting himself to repeating his promise to bomb Iran “back to the stone age” in the next two to three weeks.
Why Trump might choose the extended Easter weekend for a ground operation in Iran
Nor has the president made clear what the specific purpose of the war is, including whether he plans to send ground troops to seize Iran's enriched uranium or reduce its ability to control the strategic Strait of Hormuz.
Iran war 'nearing end'
Donald Trump has told Americans that the war in Iran is “almost over”, estimating that the US involvement will last two to three more weeks.
“Tonight, I am pleased to say that these core strategic objectives are nearing completion”he stated in a prime-time speech.
“We've done everything. Their navy is gone. Their air force is gone. Their missiles are nearly exhausted or destroyed. Together, these actions will cripple Iran's military, destroy its ability to support terrorist proxies, and eliminate its ability to build a nuclear bomb.”Trump said.
Earlier, the White House conveyed in a statement that the US objectives in Iran “they were clear and constant: destroy the ballistic missile arsenal and production capacity, annihilate the navy, cut off support for terrorist groups, and prevent the world's leading state sponsor of terrorism from obtaining a nuclear weapon.”
The US will hit Iran “extremely hard” in the coming weeks
Trump has indicated that the US is prepared to step up military operations in the next two to three weeks.
“We're going to hit them extremely hard in the next two to three weeks. We're going to take them back to the stone age where they belong.”he stated.
“Meanwhile, discussions continue”the president added. “Regime change was not our goal. We never said that, but regime change happened because all their original leaders are dead. They're all dead.”
Iran's new leaders, 'less radical'
Trump claimed that Iran's new leaders are “less radical and much more reasonable” as US officials negotiate a possible end to the conflict.
He reiterated the idea that the US had achieved regime change, saying “all the original leaders are dead”, and said Washington was monitoring key targets in parallel with the negotiations.
“If no agreement is reached, we will hit every power station of theirs very hard, probably simultaneously”Trump said.
He added that the US had not attacked Iran's oil infrastructure, although it would “the easiest target” because such action would leave them “no chance of survival or reconstruction”.
Trump asks allies to reopen Strait of Hormuz
Donald Trump said US allies should be the ones to reopen the Strait of Hormuz, urging them to “gathering up his courage” and take control of the critical sea route.
“Go to the strait and claim it, protect it, use it for yourselves. The hard part has been done, so it should be easy”he said.
Despite rising energy costs, Trump downplayed the impact of the strait closure on the US, saying the country does not need the route.
At the same time, he stated that maritime traffic “it will resume on its own” after the war, despite Iran's repeated declarations of maintaining the blockade of the passage through which approximately 20% of the world's oil transits.
Can Trump withdraw the US from NATO? Is it legally possible?
Although Trump said recapturing the strait would be “easy,” the U.S. military has so far not attempted to escort oil tankers through the area because of the Iranian threat.
“Countries of the world that receive oil through the Strait of Hormuz must take care of this passage. They must value it”he stated.
Trump did not mention NATO
Trump did not directly address NATO in the speech, although in an earlier interview with Reuters he said he would express his displeasure with the alliance for its lack of support in achieving US goals in Iran, Reuters notes.
Transatlantic relations have been strained in his second term after European allies rejected requests to help secure oil traffic through the Strait of Hormuz.
Trump stated in the same interview that he is taking “absolute” considering the withdrawal of the United States from NATO, an alliance ratified by the US Senate in 1949.
It is not the first time that the American leader evokes this possibility, he succeeded in the past in putting pressure on member states to increase their defense spending.
