The Trump administration has become a "source of volatility," and oil prices are on another "roller coaster ride."
A deleted social media post by the U.S. Secretary of Energy and the subsequent chaotic statements from the Trump administration are dragging the global crude oil market into violent turmoil.
On Tuesday, U.S. Secretary of Energy Chris Wright posted on social media platform X, claiming that the U.S. Navy had successfully escorted an oil tanker through the Strait of Hormuz to ensure the flow of crude oil to the global market. This news temporarily eased concerns about a prolonged energy shock, causing U.S. benchmark crude oil futures prices to briefly plunge nearly 20%.
However, the post was deleted within minutes. The White House then clarified that no such escort operation had taken place, but said the military was, “devising additional options.” This erratic messaging prompted a rapid reversal in the market, narrowing oil price declines.
“That’s an unforgivable mistake,” noted Robert Yawger, a commodities specialist at Mizuho Securities. Within just 10 minutes of the post, an exchange-traded fund (ETF) tied to crude oil futures lost $84 million in market value.
The previous day, U.S. crude prices had surged 31%, but after Trump declared the war was “almost over,” the gains nearly vanished.
With the oil market highly sensitive to the Middle East conflict, contradictory official information not only erased millions of dollars in trading value, but also forced investors to navigate the “fog of war,” further exacerbating market vulnerability and volatility.
Chaotic Signals Heighten Oil Price Volatility
After Wright’s post rocked the market, Trump’s own social media comments further amplified the confusion.
Tuesday afternoon, Trump sent numerous posts on social media, first insisting the U.S. had “no reports of mines,” then urging Iranian troops to clear any explosives they may have planted. He then claimed that the U.S. had “hit and completely destroyed 10 inactive minelaying boats,” and promised “there will be more.”
This scattershot and contradictory official information frustrated observers on Wall Street and in Washington. Though crude oil futures rebounded from intraday lows, they still closed down 12% on Tuesday, at $83.45 per barrel, marking the largest one-day drop in four years. The intraday low of $76.73 was a 36% plunge from Sunday night’s high of $119.48—a two-day peak-to-valley drop not seen since the depths of the pandemic in April 2020.
Traders kept a close eye on every headline, and speculators drove wild price swings throughout the market. As Yawger said, “Where is the boundary between fantasy and reality? It’s hard to say.”
Michael Rosen, Chief Investment Officer at Angeles Investments, commented: “From a political standpoint and the market’s reaction to all of this, there’s a kind of randomness.”
Energy Giants Face “Biggest Crisis”
As conflict spreads across the Middle East, the region’s energy giants are pushed to the brink. Global retail prices for gasoline and diesel have soared, turning into a vulnerability in America’s election year and prompting some Asian governments to limit fuel usage.
The critical Strait of Hormuz is essentially closed to almost all traffic. Saudi Arabia, Iraq, the UAE, and Kuwait have all cut production. There’s little sign that, without at least a pause in hostilities, the Strait can be reopened soon.
Saudi Aramco CEO Amin Nasser warned during a Tuesday earnings call that the longer energy flows are disrupted, “the more catastrophic the consequences for the oil market.” He emphasized: “While we’ve faced interruptions before, this is definitely the biggest crisis ever faced by the region’s oil and gas industry.”
Additionally, the escalation of conflict has had tangible impacts on other energy infrastructure. Bloomberg reported that the UAE’s largest refinery in Ruwais suspended operations after a drone attack caused a fire in its industrial zone.
Military Escalation and Political Divisions
Although Trump had hinted to CBS News the day before that the war was “very complete, almost over,” signals from U.S. officials on Tuesday showed that military action against Iran is escalating and hopes for diplomatic negotiations are slim.
Defense Secretary Pete Hegseth said at a press briefing that the U.S. and Israel were mounting their most intense attacks yet against Iran. “We will not relent until the enemy is thoroughly and decisively defeated,” Hegseth said. “We’re acting on our own schedule and at times of our choosing.”
However, the U.S. Congress shows deep partisan divisions on the war issue. Democratic Senator Richard Blumenthal, after receiving a Pentagon briefing, said it “did not convince me that we have clear objectives or strategy, or an endgame plan.”
With the U.S. midterm elections approaching, the Trump administration faces tremendous pressure in its policy choices handling surging oil prices and military conflict.
White House Press Secretary Karoline Leavitt said rising energy costs were temporary and would fall after Iran operations end. Nevertheless, amid continual official confusion and escalating geopolitical risks, investors must be prepared for sustained severe market volatility.
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