Trump "anti-sanctions" on Iran: Oil prices surge, but traders doubt it will materialize

Trump "anti-sanctions" on Iran: Oil prices surge, but traders doubt it will materialize

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Trump announces a maritime blockade against Iran; oil prices rise in response, but the market has doubts about its feasibility.

Iran’s blockade of the Strait of Hormuz has lasted for six weeks. In a tit-for-tat move, the Trump administration announced that the U.S. Navy will implement a counter-blockade on Iran. This tough stance has quickly shaken the global energy market, with crude oil, natural gas, and aluminum prices all rising. However, significant obstacles in execution have kept the market cautious.

After diplomatic talks held over the weekend in Islamabad failed to achieve a breakthrough, Trump vowed that the U.S. Navy would prevent "any ships attempting to enter or exit the Strait of Hormuz." According to CCTV International News, U.S. President Trump told the media after arriving at Andrews Air Force Base in Maryland aboard Air Force One that the U.S. military will implement a blockade against Iran at 10:00 a.m. U.S. Eastern Time on April 13, which is 10:00 p.m. Beijing Time tonight.

Meanwhile, Israel’s threats have escalated significantly. According to Xinhua News Agency, Channel 12 of Israeli television reported on the 13th that Prime Minister Netanyahu stated the ceasefire with Iran may end soon.

Implementation Much Harder Than the Venezuela Precedent

Earlier this year, the Trump administration imposed a similar blockade on Venezuela, deploying about a dozen warships to track the country’s oil tankers as far as the Indian Ocean, ultimately achieving some success. However, applying the same approach to Iran faces very different challenges.

Iran’s oil exports are much larger than Venezuela’s and are even more crucial to the global energy market. More importantly, Iran has already demonstrated strong retaliatory capabilities by blocking the Strait of Hormuz and attacking oil tankers. If the U.S. Navy inspects, intercepts, or even boards and detains relevant ships, it will likely require the use of force, and the subsequent handling of confiscated goods presents another difficult problem.

Iran has issued warnings that if its ports are threatened, it will strike all ports within and around the Persian Gulf. Just hours before the blockade was expected to take effect, three oil tankers had already attempted to skirt close to the Iranian coastline to pass through the Strait of Hormuz.

Oil Prices Rise But Remain Below Recent Highs

U.S. oil prices jumped on the day Trump threatened the blockade, but at around $104 per barrel, it remains well below recent highs. The market’s conflicted feelings reflect traders’ widespread doubts about whether this threat will materialize—some believe this is just another classic negotiating tactic by a president known for bargaining.

Gasoline prices are already at uncomfortably high levels with the midterm elections approaching, and U.S. officials have admitted that objectively allowing Iranian oil to keep circulating helps suppress crude oil futures prices. This reality constrains how far the Trump administration is willing to escalate the situation.

Risk Warning and DisclaimerThe market carries risks, and investments require caution. This article does not constitute individual investment advice and does not consider the unique investment objectives, financial situation, or needs of any particular user. Users should consider whether any opinions, views, or conclusions in this article are suitable for their own situation. Investing based on this is at your own risk. ```