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Oil Prices Rise as Trump Tweets Threat Against Iran

By Rich Smith – Apr 22, 2020 at 1:24PM

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Whether this was accident or design is an open question.

Responding to a standoff between 11 Iranian warships making "dangerous and harassing approaches" to U.S. naval vessels in the Persian Gulf last week, President Trump sent this Tweet this morning:  

Pentagon officials later clarified that the tweet in question did not constitute an official order to the U.S. Navy to fire upon Iranian ships, but was rather "an important warning to the Iranians ... emphasizing [that] all of our ships retain the right of self-defense."

Map of Iran under a magnifying glass

Image source: Getty Images.

Nevertheless, investors appear to be giving weight to the President's words today, worrying that conflict in the Gulf could interrupt oil supplies going forward. As a result, after several days of tumultuous downturns, oil prices are back on the rise today. In early afternoon trading, Brent crude oil prices are up more than 6% from yesterday's close, and WTI crude has jumped 21%.

This may, in fact, have been the President's intention.

To understand why, consider two things: First, the Pentagon is saying that there has in fact been no actual change in policy tied to the President's tweet this morning. And second, in an apparently unrelated tweet yesterday, the President responded to the precipitous decline in oil prices by promising to "never let the great U.S. Oil & Gas Industry down."

It may be a coincidence that today's tweet is sending oil prices up ... but it also may not be a coincidence at all.

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