Donald Trump has claimed the US and Iran are on the verge of a peace agreement, sending oil prices down and stock markets up. This follows hours after he threatened Iran would be struck “VERY HARD”, which had the opposite effect on markets.
This is the 39th time the president has declared US-Iranian talks close to fruition. On five occasions, the promise of peace has involved walking back threats of mass devastation, including destruction of civilian infrastructure.
While menacing Iran on Thursday, Trump also pledged the US would take “total control” of the country’s oil and gas markets and seize Kharg Island. He has threatened this before, but this time it came while bombing Iran in a tit-for-tat exchange that damaged a critical reservoir.
By Thursday afternoon, the prospect of mass destruction evaporated. Trump announced on Truth Social he had cancelled scheduled strikes. On Friday, a White House briefing said a text was in place both sides could live with, and a signing ceremony could be held in days.
Iran’s foreign ministry was less definite, saying the proposed agreement was being studied. Nonetheless, oil prices fell below $90 a barrel. Markets continue to react to Trump’s rhetoric, despite many false dawns.
A BBC investigation found multimillion-dollar trades were made just before major announcements. The “known liar problem” suggests markets heavily discount Trump’s words, but the economic implications of Gulf war or peace are so enormous that even discounted reactions move the dial.
